The global coronavirus pandemic may not do much to change the long-standing, deep-rooted rivalry between
With a record net loss of
"My biggest worry is ANA will repeat the mistakes made by JAL, which ended up going bankrupt, because it had become too big a company," said
"First off, restructuring is something that a struggling company needs to undertake to survive a crisis. But if the future is still uncertain, just like now, the government may have to extend support before it becomes too late," Nomura, an expert on the airline industry, said.
For years, ANA has been scrambling for a bigger market share in fierce competition with JAL, which went bankrupt in 2010 but was revived with government support, including a
ANA President and CEO
"We are not expecting it," he told a press conference on Tuesday after the company announced its earnings outlook.
He also brushed off concerns about the financial standing of ANA and promised a return to profitability in fiscal 2021 with a shift to a new business model.
The use of public money for JAL raised questions about fair competition in the aviation industry, prompting the government to allocate more slots at
ANA's efforts to get ahead of JAL appeared to be paying off before the pandemic. In the business year through
The two airlines have almost the same number of domestic and international routes.
The year 2020 has been marked by an unexpected turn of events, including a one-year postponement of the
The pandemic has also pounded global airlines. Flag carrier
As part of restructuring, ANA said Tuesday it will reduce its fleet more than initially planned by bringing forward some of its scheduled retirements, targeting Boeing 777s used for long-distance flights. The ANA group, including budget airline
ANA will receive
"There was already excessive competition. ANA had sought to get bigger and bigger, putting low-cost carriers under its wing," Tozaki said.
"Despite some moving away from its expansion strategy, it will still want to keep its networks of international flights in anticipation of air travel returning to normal after the pandemic."
Unlike ANA, JAL has taken a cautious stance on LCCs. It was only in mid-October that
With no immediate end in sight to the pandemic, the race for survival among airlines is expected to continue.
"What needs to be averted is a situation in which ANA and JAL are so fixated on each other that they only vie for the same share of the pie," Nomura said. "It may take a while for international travel to recover...but it also means there is time to adjust to a new business style under the new normal."
==Kyodo
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