Air Transport World

Japan Air Lines turnaround taken in stride.

Tokyo--With its once-a-decade operating loss out of the way, Japan Air Lines has returned to the things it does so well--increasing traffic, planning for the future and, most of all, making money.

Many airlines would back away from a fleet procurement decision in a year following biggest operating loss, a $112.8 million excursion into red ink during the past fiscal year. But the requirement existed to replace the old McDonnel Douglas DC-8s that once made up the bulk of JAL's fleet. Noise was the most pressing legal problem requiring a replacement be found, and fuel costs--a cost factor especially pronounced in resource-poor Japan--was one of the major culprits contibuting to

Also encouraging a go-ahead on the fleet decision was the fact that JAL already had turned around its operating loss into a profit. After six months of the current fiscal year JAL had recorded a $77.2 million operating profit, helped to some extent by lower fuel prices. This accentuates the importance of fuel cost to JAL. The only other serious loss year suffered by JAL was in the 1973-74 fuel panic. The first loss was a minor dip in 1962.

The decision to buy Boeing's offering of the 767-200 and 767-300 over Airbus' competing bid for the A310 and A300-600 was made mostly on the fact that the two Boeing airplanes are much more similar to each other than the two Airbuses, according to Mitsunari Kawano, JAL managing director, corporate research and planning. …

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