JAL/JAS Integration: Toward a New Era of Competition

On October 2, 2002, JAL and JAS established a new holding company after obtaining the necessary approval from the government bodies. Full integration is planned to take place in April 2004. This paper will primarily explain how JAL/JAS integration will enable JAL to compete effectively with ANA, the giant in the domestic market, and how it will reinforce JAL's competitiveness through further cost reduction and revenue enhancement. In addition, the paper will explain how the keener domestic competition brought about by this integration could resolve the following two issues for the first time in the Japanese aviation history. Those two issues are: (1) providing better service to domestic customers, and (2) making Japanese airlines more competitive against foreign airlines in the international market. As a result, the paper will argue that such an integration, a logical outcome of the post-war civil aviation history of Japan, will significantly benefit customers, Japanese aviation industry and Japanese society as a whole.