Japanese Airlines Carry On With Domestic Ops Despite Demand Drop

Japanese airlines are continuing on with domestic operations despite a significant drop in demand. On April 17th, Japan Airlines (JAL) and All Nippon Airways (ANA) announced an additional round of domestic flight cuts. However, the cuts are not precisely lined up with the drop in demand. In fact, both airlines are operating significantly more flights than there is demand.

Japanese carriers are still offering robust domestic schedules. Photo: Getty Images

Continuing domestic flights

ANA and JAL are pushing forward with domestic flights amid a drop in demand. However, through the end of April, both airlines are reducing additional domestic flights.

JAL will reduce another 60% of its schedule through the end of this month. The reductions of 61% will take effect the week of April 19th, while a further 1% cut will take effect starting April 26th. Meanwhile, ANA has already canceled over 7,000 flights in April, with hundreds more joining the list. Both airlines will be operating about 40-50% of their flight schedules in April.

Japan Airlines is cutting about 60% of its schedule. Photo: Boeing

Per Reuters, Prime Minister Shinzo Abe has described the aviation sector in Japan as a “vital” part of the country. Despite Japan entering into a state of emergency, the government has left airlines fairly intact. Furthermore, the government has indicated that it will support airlines through this financial crunch.

Is this sustainable?

The story in Japan is that airlines are continuing business as usual, with schedules reflecting demand. However, a fair bit of that demand comes from key economic and cargo links. Japan Airlines announced that it would be operating additional cargo-only flights on key domestic routes in Japan.

ANA and JAL Domestic Reductions
ANA and Japan Airlines have announced significant domestic flight reductions but not yet in line with demand. Photo: Getty Images

It is no secret that airlines are likely in no position to continue to fly with only a handful of passengers through May. While Japan has been lucky and not faced a crippling outbreak like other countries, the country still has to remain vigilant. In terms of airline financial health, the government, deeming air travel essential to infrastructure, will likely offer support that carriers need to pull through. Although airlines may also seek external private financing in the interim.

For now, Japan’s state of emergency will last until May 6th. While the government has not yet locked down the country, travel demand is still way down. Adding to this problem is the significant lack of international tourism. Demand will likely remain low amid the global pandemic. Other countries have issued stern lockdown orders lasting through May. And, even when air travel does recover, it will be a gradual increase as several airlines are starting to reflect this in summer schedules.

Japan Airlines
Without the Olympics in 2020, Japanese airlines are losing out on a major opportunity to earn cash this year. Photo: Getty Images

What will the future of Japan’s air system look like?

Air travel demand will depend on how the coronavirus pandemic plays out in Japan. The country is currently in the midst of its second wave.

ANA and JAL will undoubtedly continue to exist. Both airlines are well-regarded around the world and the pride of Japan at airports around the world. National carriers can help build up a country’s reputation– much like Emirates and Qatar Airways have built up the UAE and Qatar’s global standing, respectively, through travel.

Do you think Japanese carriers should continue to offer a robust domestic schedule? Let us know in the comments!