JAL Heading Back To Drawing Board With Resort-Flight Business

TOKYO (Nikkei)–Japan Airlines Corp. will suspend a previous plan to sell interests in its resort-bound flight operations and instead consider other options, such as establishing a business cooperation with low-cost carriers, The Nikkei learned Thursday.

The financially strapped airline had originally planned to ask JTB Corp. and other major travel agencies to take stakes in wholly owned unit JALways Co., which flies to such resort destinations as Hawaii, Australia and Thailand. JAL had planned to use proceeds from the transaction to repay loans and procure planes.

But a task force reporting to Transport Minister Seiji Maehara that is overseeing JAL’s rehabilitation has called for a tighter focus on routes used heavily by business travelers. The resort-bound flights would then be operated through partnerships with low-cost carriers in Asia.

With the task force’s recommendations in mind, JAL will stop preparations for the sale of its JALways shares.

The carrier will also re-evaluate its plan to sell baggage handling firm JAL Ground Service Co. The results of an in-house assessment showed that without major streamlining measures, the sale of the business would not generate any profit.

The proposed sale of JAL’s holdings in airline caterer TFK, however, is still being considered.

(The Nikkei Oct. 16 morning edition)

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