JAL, JAS to merge marketing in October


The merger will make JAL-JAS Japan's new aviation market leader

Staff and wire reports

TOKYO, Japan (CNN) -- Japan Airlines (JAL) and Japan Air System (JAS) plan to integrate their marketing divisions into a new ticket sales company in October, according to a report in Japanese financial newspaper the Nihon Keizai Shimbun.

The new company, JAL Sales, will handle ticket sales by JAS and a JAL subsidiary, and come under a joint holding company to be set up in October, according to Kyodo News.

JAL and JAS will then consolidate the operations of their international, domestic and freight services by April 2004.

Both carriers had earlier announced a merger plan, and will now discount prices on all domestic flights, the Nihon Keizai reported.

The move will give JAL and JAS the biggest share of the Japanese market, and make them more competitive with All Nippon Airways (ANA), Japan's biggest domestic carrier.

More flights than ANA

For example, on the Tokyo-Sapporo route, the merged JAL-JAS operation will have 25 round-trip flights every day from October, compared to ANA's 14.

JAL and JAS will cut nine flights at the Tokyo International Airport in October, as required by the Fair Trade Commission. The revenue loss from flights and discounts is expected to cost around 25 billion yen, according to reports.

Prices of all domestic flight prices will be cut by 10 percent in October, with discounts of 26 percent for flights competing with other airlines.

JAL and JAS aim to restructure overlapping operations, to boost profit by 50 billion yen by 2005, the Nihon Keizai said. Both companies said they would make future route planning on an integrated basis.