JAL and ANA in dogfight over Haneda landing slots

JAL and ANA in dogfight over Haneda landing slots

TOKYO - Tokyo's busy Haneda airport is the latest battleground for Japan's two big carriers, Japan Airlines Co Ltd and ANA Holdings, in a politically-charged fight over US$400 million (S$510 million worth of landing rights.

The two carriers have locked horns for decades at home, but this clash threatens to take on an international dimension by embroiling British Airways and other foreign carriers.

At issue are 20 new landing slots at Haneda, the world's fourth busiest airport, which according to industry experts, can generate around US$20 million each in annual operating profit.

With no new runways or airports planned for Japan's capital, the October ruling will likely be the last major slot distribution in Tokyo for years and could give one of the two carriers a competitive edge.

Aviation regulators will decide who gets the slots by October. Normally the allotment, available after the opening of a new runway, would be split down the middle, but ANA argues it deserves the lot. Getting them all would for the first time make it Japan's biggest international carrier.

ANA, already the nation's biggest carrier by revenue and fleet size, is miffed a Democrat government in 2010 used 350 billion yen (S$4.58 billion) of taxpayer money to bail out a bankrupt JAL and says now it is payback-time for the helping hand given to its rival.

"We are not on an equal footing, the revival of JAL went too far," ANA Group CEO Shinichiro Ito said at his company's annual shareholder gathering in Tokyo in June. "ANA deserves all the slots."

Prime Minister Shinzo Abe's Liberal Democratic Party, in opposition at the time of the JAL rescue, is cocking a sympathetic ear.

"JAL should have revived by itself without public money," Norio Mitsuya, an LDP lawmaker closely involved with formulating aviation policy for his party told Reuters in an interview.

"Having much of its debt waived has made things easier for JAL, while ANA is left with its credit burden. It was too much."

Once Asia's biggest carrier, JAL's demise was spectacular, its market value at one point being worth less than a single Boeing 747 jumbo jet.

The reason given for the government bailout was to protect the country's air services, but the reality was that JAL had slashed 42 domestic routes, said Mitsuya, who was a senior aviation bureau official before joining parliament.

Those route cuts were needed to stem losses says JAL, which also laid off 21,000 people, or 40 percent of its workforce, slashed salaries by a fifth and pension payouts for retired workers by almost a third.

"JAL's revival, including asset reductions, layoffs, debt waivers, pension cuts, fleet and route cuts was done under the guidance of the bankruptcy courts," said Hideki Togasaka an official on the policy research committee of the Democratic Party of Japan, which Abe's government ousted last year.

"We don't consider the public assistance offered JAL as excessive," Togasaka added.

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