Japan Airlines Corp. filed for bankruptcy protection on Tuesday, ahead of a bid to save the heavily indebted carrier.
A short history of the airline reveals interesting parallels with an Air India in the middle of its own survival battle.
Japan Airlines was initially established as a private firm but was nationalized in 1953 to serve a nation coming out of the ruins of war. It became Japan’s national carrier and had a good initial run.
The first blows came when Japan deregulated the airlines business in the 1980s. There was a lot of corporate restructuring in the 1990s, including a low-cost domestic subsidiary and fleet renewal through the purchase of new planes. Then there was also a merger that did not work out.
Through all these ups and downs, Japan Airlines neither got its finances in order nor improved service standards, letting competitors such as Singapore Airlines, Thai Airways and Cathay Pacific dominate the booming Asian region. The moral: national carriers can survive only if they are able to compete in the open skies.