The problems that grounded the global B787 fleet have hurt Japan Airlines and All Nippon Airways more than other carriers. Early takers of Boeing’s new plane, the pair account for 24 of the 50 Dreamliners brought into service until the problems stopped deliveries.
Across the Pacific, JAL had deployed the 787 on routes from Tokyo to Boston and San Diego, the latter launched as recently as December 2012. For now, the carrier, which has ordered altogether 45 787s, has replaced the grounded planes on these sectors with 777s. However, a new 787 service to Helsinki, which was planned to kick off in March, has been postponed until the Dreamliner is cleared to fly again.
The 787 has earned praise from operators in terms of its cargo capacity. Replacing it with a 777 on the transpacific routes leaves JAL Cargo with ample space there, but in other sectors, where service reverted to 767-300 aircraft, the 787′s troubles have dented JAL’s payload options.
After its emergence from bankruptcy protection, JAL has seen a rise in its cargo traffic. For the nine months to December 31, 2012, the airline posted a 4.8 percent increase in freight tonne-kilometers over the same period a year earlier.
Rival ANA boosted its cargo operation at the end of last year when Yamato Transport, Japan’s leading express parcel operator, signed an agreement to use the airline’s express hub in Okinawa. ANA’s express traffic through Okinawa has persistently lagged expectations, so the Yamato deal promises a huge shot in the arm for the freighter operation.
For both ANA and JAL, express traffic has benefited from the opening of Haneda Airport to international flying, thanks to its closer proximity to metropolitan Tokyo than Narita International Airport, the capital’s international gateway.
Medical equipment and pharmaceuticals have emerged as another key growth sector for the airlines as well as for several forwarders, Tomoyasu Fukuyama, president of Logi-Rex, says. His own forwarding company, which recently expanded its warehouse footprint at Narita by almost one-third, has focused on this traffic and perishables, largely in cooperation with JAL Cargo.
The airline is bent on boosting revenues from perishables traffic. It has developed a new service in tandem with Japan Post that moves small shipments of fish, fruit and other perishables in special temperature-controlled containers that have been developed in partnership with an equipment manufacturer.
Shinja Nagayasu, assistant manager of marketing, international route marketing, cargo and mail at JAL, says the service would kick off April 1 on routes to Taiwan and Singapore and be subsequently expanded to other destinations in Asia.
This should go some way toward strengthening JAL’s yields, which have been affected by the overall market situation, although the cargo division reached its revenue targets for the period, Nagayasu says. While the airline’s tonnage rose in the nine months to December 31, cargo revenues slipped 2.2 percent to 57.5 billion yen (US$621 million).
In part, this reflects the overcapacity in the market. Some carriers, such as Singapore Airlines, have cut back their freighter service to Japan, but others have put in fresh capacity, Nagayasu says, adding that the market is “quite tough at the moment.”
The second factor has been the weakness of Japan’s exports. In January, the tonnage of exports by air was down 28 percent.
This has forced JAL to loosen its policy of focusing on traffic originating or terminating in Japan and taking on transit cargo to and from other points in Asia, which commands lower yields. Nippon Cargo Airlines has been forced to do likewise – to a larger extent – to fill its freighters.
“We are still heavier out of Asia than we would like, but it is improving,” says Shawn McWhorter, the all-cargo airline’s president for the Americas. NCA now has two 747-8 freighters in its fleet and will take delivery of three more before the end of this year. The airline is taking 747-400Fs out of service as the -8s join its lineup, but this constitutes a 15 percent increase in its capacity.
“The -8 has been a great plane for us. We have got payloads of 139, almost 140 tonnes. We are very pleased with its performance,” McWhorter says. At this point, however, NCA cannot fill the aircraft with exports out of Japan.
Lately, there has been some optimism about exports as a result of the election of a new government and changes at the helm of the Bank of Japan, which have pushed down the exchange rate of the yen. However, operators do not anticipate a surge in airfreight exports.
“According to our [forwarder] customers in Japan, companies that had factories in Japan have already moved production to Southeast Asia or China, so we do not expect a big change in exports due to the currency movements,” Nagayasu says.