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Why Did JAL Go Bankrupt?  
User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9189 posts, RR: 15
Posted (3 years 7 months 3 days 23 hours ago) and read 10661 times:

Why did JAL go bankrupt?

When did they start to post a loss?

Even though they have financial problems they need not sell all their B 747-400s for cash since a lot of their routes are very busy.

50 replies: All unread, showing first 25:
 
User currently offlineCOSPN From Northern Mariana Islands, joined Oct 2001, 1623 posts, RR: 0
Reply 1, posted (3 years 7 months 3 days 13 hours ago) and read 10367 times:

Not wanting to chage things as others flew 777's JAL kept flying 747-200 and 400's even NRT-GUM, NRT-HNL and many other loosing routes...they always had more seats for sale than pax to fill them....JAL will be fine now the 747's are heading to the Scrapyard in Arkansas....

User currently offlinejfk777 From United States of America, joined Aug 2006, 8428 posts, RR: 7
Reply 2, posted (3 years 7 months 3 days 13 hours ago) and read 10343 times:
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JAL also flew some routes that were loosers like Osaka to Paris & Tokyo to Rome.

User currently offlineworldliner From United Kingdom, joined Aug 2005, 275 posts, RR: 0
Reply 3, posted (3 years 7 months 3 days 4 hours ago) and read 9666 times:

Three words. All Nippon Airlines.


@777Worldliner
User currently offline777way From Pakistan, joined Dec 2005, 5867 posts, RR: 4
Reply 4, posted (3 years 7 months 3 days 4 hours ago) and read 9295 times:

Any chances of ANa taking over JAL in the future?

User currently offlineairbuseric From Netherlands, joined Jan 2005, 4273 posts, RR: 51
Reply 5, posted (3 years 7 months 3 days 3 hours ago) and read 8986 times:

Quoting United Airline (Thread starter):
When did they start to post a loss?

When did they ever made a good profit since they became a more privately owned airline instread of government controlled...

Quoting worldliner (Reply 4):
Three words. All Nippon Airlines.

Sorry to say, but ANA is not doing well either...

Quoting 777way (Reply 5):
Any chances of ANa taking over JAL in the future?

Taking over? No, don't expect it. Merging? Yes, maybe some day. Future will tell... Both airlines, but especially JL, are struggling at the moment.

Quoting jfk777 (Reply 2):
JAL also flew some routes that were loosers like Osaka to Paris & Tokyo to Rome.

Many airlines do. Just money losers in a route network is not the main reason to get close to bankruptcy. It's the whole way the company is running behind the scenes which is causing the major problems in JL. Building up a good network for your clientele can also mean to operate a few routes which perform less, but you have to compensate it with another route or elsewhere.

e.g. NRT-DME is also loosing money, but kept for political reasons. The flight has bad load factors and cargo is almost nothing also.



"The whole world steps aside for the man who knows where he is going"
User currently offlineAlnicoCunife From United States of America, joined Mar 2011, 167 posts, RR: 0
Reply 6, posted (3 years 7 months 3 days ago) and read 7877 times:

Because they were run like a government and spent more money they they took in. Really it just that simple and basic.

User currently offlinemighkal From Hong Kong, joined Oct 2005, 14 posts, RR: 0
Reply 7, posted (3 years 7 months 3 days ago) and read 7827 times:
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Quoting United Airline (Thread starter):
Even though they have financial problems they need not sell all their B 747-400s for cash since a lot of their routes are very busy.

JAL's relationship with the 747s has been so long-standing it's hard to imagine them breaking up.
But i suppose the newer 777s are much more attractive than the 747s. And during tough times, they have to make tough choices.
Correct me if i'm wrong, i read somewhere that the 747s are inefficient in that reducing load factor does not save on fuel consumption. So for example if a flight has a 70% load, it would burn almost as much fuel as it would with 100% load.


User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9189 posts, RR: 15
Reply 8, posted (3 years 7 months 3 days ago) and read 7665 times:

When did they privatize JAL?

Oh ANA is not doing well either? How come?


User currently offlineFlyNWA727 From United States of America, joined Jan 2010, 305 posts, RR: 0
Reply 9, posted (3 years 7 months 3 days ago) and read 7631 times:

Quoting worldliner (Reply 4):
Three words. All Nippon Airlines.

Actually, it's "All Nippon Airways".  



First flight aboard a Northwest B727-251ADV out of BWI Thurgood Marshall Airport, my hometown airport.
User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9189 posts, RR: 15
Reply 10, posted (3 years 7 months 2 days 17 hours ago) and read 7155 times:

Hope they will recover 100% and order A 380s and/or B 747-8s

User currently offlineFlyNWA727 From United States of America, joined Jan 2010, 305 posts, RR: 0
Reply 11, posted (3 years 7 months 2 days 17 hours ago) and read 7118 times:

Quoting United Airline (Reply 12):
Hope they will recover 100% and order A 380s and/or B 747-8s

I don't think a major airline in the cusp of a massive down-sizing which inc. eliminating their entire cargo division and getting rid of their entire passenger Boeing 747 fleet ... which was once the largest in the industry ... will be seeking to purchasing massive A380s and 747s in the near future. I am so glad that a lot of posters on here don't run their own airlines, because if they did, they'd run them straight into the ground. Not every airline needs or wants A380s and 747s. JAL has made that more than clear. It almost seems as if their 77W fleet is more capacity than they need. Let's just focus on JAL becoming profitable and strong again, not purchasing aircraft they don't need so they can have bragging rights.



First flight aboard a Northwest B727-251ADV out of BWI Thurgood Marshall Airport, my hometown airport.
User currently offlinekiwiandrew From New Zealand, joined Jun 2005, 8580 posts, RR: 13
Reply 12, posted (3 years 7 months 2 days 17 hours ago) and read 7089 times:
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Quoting FlyNWA727 (Reply 13):
I am so glad that a lot of posters on here don't run their own airlines, because if they did, they'd run them straight into the ground.

So true , I can be as guilty as the next person of dreaming up amazing fantasy networks and fleet plans for my favourite airlines , but for the sake of the passengers and employees it is just as well that I am in no position to get those schemes out of my dreamworld and into the real one . I hate to think how many people I would put out into the unemployment lines .



Moderation in all things ... including moderation ;-)
User currently offlineAsiaflyer From Singapore, joined May 2007, 1140 posts, RR: 0
Reply 13, posted (3 years 7 months 1 day 23 hours ago) and read 6522 times:

JAL is set to emerge from bankrupcy this week.
The "new" JAL has chopped 49 routes and cut its fleet by 103 planes.

http://www.bloomberg.com/news/2011-0...s-no-1-exits-court-protection.html



SQ,MI,MH,CX,KA,CA,CZ,MU,KE,OZ,QF,NZ,FD,JQ,3K,5J,IT,AI,IC,QR,SK,LF,KL,AF,LH,LX,OS,SR,BA,SN,FR,WF,1I,5T,VZ,VX,AC,NW,UA,US,
User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9189 posts, RR: 15
Reply 14, posted (3 years 7 months 1 day 22 hours ago) and read 6465 times:

How many planes they have now?

When they recover and become strong again, they will need the B 747-8 and/or the A 380 for some very busy routes. Hope they will get there. Doubt they ever said that they don't want both forever


User currently offlinecarpethead From Japan, joined Aug 2004, 2971 posts, RR: 3
Reply 15, posted (3 years 7 months 1 day 22 hours ago) and read 6408 times:

There are a lot of reasons behind JL's bankruptcy. Very bureaucratic way of running its business, too many employees (particularly white collar), running too many loss making routes due to political pressure, etc.

While their fleet was very diversified due to the merger of JAL & JAS back in 2003, its age certainly wasn't the biggest problem. The 747 classics certainly needed to go. However, after 2008 downturn, their 747 fleet was certainly too big to sustain its downsized-capacity. I still contend that not all the 747s needed to go because they can still be used on domestic trunk runs and certain int'l routes where moving lots of people is called on for like NRT-HNL.

The recent deliveries of the 738s & E-170s have speeded up the retirement of the MD80s and A300s. Over the last six months, they have also taken delivery of four 763ERs. Frankly, an airline in bankruptcy should not be taking delivery of anything large as a 767.

Lastly, JL is in no shape to be ordering anything bigger than the 787. The 787s will be certainly welcome to replace some of the older 767s remaining in its fleet but with the A300s soon to be history, they could defer some of the 787s to a later date. The 738s are needed to replace the MD90s that are being sold to Delta unless they want to downgauge even more.


User currently offlineordjoe From United States of America, joined Aug 2010, 718 posts, RR: 0
Reply 16, posted (3 years 7 months 1 day 12 hours ago) and read 6129 times:

Quoting carpethead (Reply 16):
There are a lot of reasons behind JL's bankruptcy. Very bureaucratic way of running its business, too many employees (particularly white collar), running too many loss making routes due to political pressure, etc.

I have hear similar. Back during the government run go go 80's (heck all of Japan was riding high in the 80's) they spent money like there is no tommorow. This is probably why they have so many routes and such a huge fleet. They continued to spend like this until very recently. Way too many losing routes, way too much capacity, far over staffed. I flew them 3 years ago HND-OKA on the 747D and 777. Both flights were about 40%LF, and they are sending a widebody on this route pretty much on the hour. On both flights also there were 3 or 4 gate agents just standing around. They basically failed to adapt to expensive fuel and cost structures needed to run an airline in these trying times.
On them getting the 748 and A380, while the aviation lover inside of me would love to see these purchases, it would be very foolish. They did this with the 747's back in the day and look where that got them.


User currently offlineCargolex From United States of America, joined Apr 2010, 1275 posts, RR: 8
Reply 17, posted (3 years 7 months 1 day 9 hours ago) and read 5907 times:

I think JAL was gravely hurt by nearly 20 years of economic malaise at home. It seems like they were always planning on the boom times of the 1980s returning and when they never did, they were stuck with a huge fleet of planes they couldn't fill and a style of operation that was alright, but profligate, during good times but waaaay too fat and inflexible during economic contractions.

The Bankruptcy was the result of adapting too late to a changing market and changing position in the world. Nowadays, they don't need those 747s, and the definitely don't need A380s. Growth is great. Bragging rights are great. But you have to fly what the market will support or you go out of business.


User currently offlinecarpethead From Japan, joined Aug 2004, 2971 posts, RR: 3
Reply 18, posted (3 years 7 months 1 day 2 hours ago) and read 5706 times:

Quoting ordjoe (Reply 17):
I flew them 3 years ago HND-OKA on the 747D and 777. Both flights were about 40%LF

You must have flown those segments on the weekdays because they are packed on the weekends and on most days thus the 744Ds and 777s are (were) assigned on that route.

Last night I pondered on the fact that the fleet of 773ERs that JAL has now was not really needed. The 744s were perfectly suited to the JL's long-haul route structure much like how other legacies like BA and UA use their 744s on long-haul routes.
Heck, they could have elected not to retire the MD-11s and hence the 772ERs would not be needed too.
Then again, that would be bad news for Boeing though.


User currently offlinejaylink From United States of America, joined Jun 2006, 41 posts, RR: 0
Reply 19, posted (3 years 7 months 1 day 2 hours ago) and read 5682 times:

One time I took an international transfer flight from NRT to KIX on JAL Express. Didn't really pay attention to others during the boarding process as we had a small child to watch and we were in the first group. Later, looking around during decent, I could only see about 10 people in the plane. I thought this must be why they went bankrupt, if government forces them to fly nearly empty planes. Then when we landed, about 100 people stood up. I just couldn't see them over the backs of the seats! ha.

User currently offlinejaylink From United States of America, joined Jun 2006, 41 posts, RR: 0
Reply 20, posted (3 years 7 months 1 day 2 hours ago) and read 5666 times:

(What follows was originally a new thread, but it was removed as a double-post. I never saw the original ...)

Regarding color schemes:


Do you prefer the previous "corporate" look, or the new post-bankruptcy design beginning March, 2011?

I'm glad "tsurumaru" is back, but this livery seems a little too plain.


http://www.aviation-designs.net/search/photo_search.php?id=00013978

http://www.airlinereporter.com/2011/...es-new-crane-livery-on-boeing-767/


User currently offlinecarpethead From Japan, joined Aug 2004, 2971 posts, RR: 3
Reply 21, posted (3 years 7 months 22 hours ago) and read 5512 times:

Who doesn't think the new scheme is too plain?
I for one will start taking photos of any JAL plane in black & white (to save costs on color prints) except maybe special scheme ones.  

Also remember that for every empty flight there is probably a full flight.


User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9189 posts, RR: 15
Reply 22, posted (3 years 7 months 17 hours ago) and read 5344 times:

If they go up again will they have the chance to get the B747-8 or the A380?

User currently offlinecarpethead From Japan, joined Aug 2004, 2971 posts, RR: 3
Reply 23, posted (3 years 7 months 17 hours ago) and read 5316 times:

Quoting United Airline (Reply 23):
If they go up again will they have the chance to get the B747-8 or the A380?

Maybe, but not in the next few years.


User currently offlineBurkhard From Germany, joined Nov 2006, 4401 posts, RR: 2
Reply 24, posted (3 years 7 months 16 hours ago) and read 5340 times:

Quoting United Airline (Reply 23):
If they go up again will they have the chance to get the B747-8 or the A380?

They should bother about this once they have good LF @ sufficient margins in the 77W. Problem is that the competition at least from Europe already comes with the better products, so their battle is uphill and they only can get good LF for their noisy twins over low ticket prices, and that is the end I'm afraid.


25 413X3 : Finally, someone says the answer. All that talk about fleet types and management are missing the biggest point. The Japanese economy has been in defl
26 Post contains images seabosdca : As fuel prices rise, a fleet of 744s and MD-11s would have just killed JAL even faster. The 77W, being the best long-haul aircraft of flexible size c
27 Tomassjc : I didn't JAL had any noisy twins since the YS11s?
28 Post contains links 777way : I preferred Arc of Sun livery, the new one is as plain as can be, it gives a rather negative impression of the airline to me as someone fond of the i
29 tullamarine : Makes you wonder who thought in the middle of all of this trauma that it would be a good idea to change the livery!!! More money that they don't have.
30 777way : And sadly the ego driven will not even be humbled to admit thats it was a mistake or that its no longer relevant after the earthquake to waste money o
31 papatango : Staying with AMR sure didn't help them!
32 carpethead : Well, there are plenty of airlines out there that operate 744s, both profitable and non-profitable. Yes, they would be a niche carrier to operate pax
33 FlyNWA727 : I tend to agree with this. That's exactly what DL did. DL wasn't too fond of keeping NW's 744s at all. In fact, the plan was to completely phase out
34 jaylink : Ok, let's take it from another angle: What could JAL have done to prevent bankruptcy? I remember being on Waikiki in the late '80s as a teenager and s
35 Post contains links Kaiarahi : Seriously, are you just making it up as you go? Fact: JAL serves over 60 domestic destinations with more than 650 domestic flights daily. Take a look
36 Post contains links jetfuel : http://www.japantoday.com/category/b...-jumbo-jet-to-retire-after-march-1 In 1970, JAL started flying a Boeing 747-100 aircraft, the first in the seri
37 jaylink : Ok, so I excessively down-played that; thank you for the stats. But, fact is, internally Japan is far more of a rail country than an aviation country
38 Kaiarahi : Have you looked at Japan's geography recently? It's composed of 2,456 islands. Trains don't travel too well across water. What does 650 daily flights
39 Trucker : So if the MD90s work to save money for Delta why don't they work to save money for JAL? To sell these planes super cheap to Delta only to turn around
40 tomassjc : JAL has been faithful to Boeing since 1970....and with the exception of the A300s inherited from JAS, JAL has never had an Airbus aircraft in their f
41 Viscount724 : Politics were involved in decisions by Japanese carriers to order US aircraft, to help offset the trade imbalance which was heavily in Japan's favour
42 Post contains links jaylink : Japan is not Micronesia. The islands are close together, and there are several bridges and tunnels. The trains DO travel from island to island. There
43 ha763 : What works for Delta doesn't mean it will work for JAL. There were only a limited number of MD-90s built. Delta is making a conscious effort to buy t
44 Post contains images N1120A : Yeah, that'll do it That's true of most aircraft anyway. The 744 is incredibly efficient if you load it. As fuel prices rise, having a lower CASM air
45 trex8 : It never hurt that what 10% and high teens % of the 767 and 777 airframes are made in Japan. The imbalance with the EU isn't exactly small either
46 JL418 : Very interesting discussion indeed, but I'm surprised to read that few people mentioned personnel costs. I read, probably it was the Japan Time in Oct
47 JL418 : Well it's no mystery that the three Japanese Heavies always worked with Boeing and, if I remember well, their share in the 787 program is an all-time
48 carpethead : Actually, domestic flying is and always has been profitable. There is more revenue by flying internationally but depending on the economy circumstanc
49 Kaiarahi : So, pretty much wrong on all counts.
50 Burkhard : The best thing is to manage the existing fleet so well that it makes profit, and then take all of its net profit to purchase new planes from money yo
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