Japan Airlines (JAL) and Nippon Yusen Kaisha have begun negotiations with a view to merging their cargo business in 2010.
Japan Airlines International (JALI), a subsidiary of JAL, and Nippon Yusen Kaisha subsidiary Nippon Cargo Airlines (NCA) could will work towards the "restructuring of their cargo business " and examine a "potential merger" due to the ongoing economic crisis, say the airlines.
"Following the collapse of the economy in the United States last autumn, the financial crisis that spread worldwide caused demand for air cargo transport to fall drastically and market situations to worsen," adds JAL.
"Through a major restructuring of the cargo business, and by combining the strengths of the two largest cargo operators in Japan to form the biggest solitary Japanese cargo transport provider, JALI and NCA foresee being able to secure profitability and raise the value of both companies."
Both JALI and NCA began code-sharing flights in March, a move that expanded their network and increased the "quality of service and convenience provided to the customers".
"Further consolidation is expected to bring about more benefits such as allowing both companies to significantly reduce cost, and to fortify their technical expertise through shared-knowledge in the areas of cargo handling," says JAL.
This would "improve the competitiveness of Japan's air cargo transport provider in the international arena, which in turn is anticipated to greatly support various industries in Japan," it adds.
The companies will begin talks with the relevant authorities to explore the merger with greater depth. They aim to start operating with a new business structure by 1 April 2010.
Source: Air Transport Intelligence news
