Graham Newton to Yuji Akasaka, President, Japan Airlines about the need to understand the balance between the risk and value of travel.
What is your strategy to recover from the pandemic?
First and foremost, our customers will need to feel confident and comfortable to resume traveling. To provide this, we will continue to expand and enhance specific services that provide safety and security to our customers throughout their journey with us. For example, we will further enhance our hygiene measures and customer comfort through antiviral and antibacterial treatments at airport counters, lounges, and on board.
We will also promote and innovate contactless and automated services using the latest technology and introduce digital health credential capability at an early stage to ensure safe, secure, and smooth air travel.
In addition, in cooperation with other travel and associated hospitality businesses, such as travel agents, tour operators and hotels, we will lobby governments and local authorities to focus on stimulation measures to recover passenger travel demand.
How important will your low-cost carrier subsidiary be? Are LCCs still viable in the current crisis with low load factors and extra health requirements?
We believe the overall market environment will change significantly post-pandemic, and from the current indications it looks like the recovery in demand for business related travel may be delayed.
On the other hand, we believe that the pent-up demand for discretionary or leisure travel, such as for tourism and visiting friends and relatives (VFR), which are the main targets of LCCs, will see a quicker recovery and outpace the growth of the rest of the markets.
In this environment we believe that the LCC model will have even more importance to meet the diverse needs of this market segment shift. We have been focusing on being a full-service carrier (FSC) so far, and though we will continue to do this, we will also strengthen our LCC business as our second pillar.
How about alliances? Will they remain important post-pandemic or must airlines concentrate on their own survival?
JAL and the entire 14-members of the oneworld alliance offer customers a high-quality, seamless travel experience for the whole of their journey throughout the world.
We recognize that alliances remain extremely important for FSCs. In the post-Covid-19 period, the recovery of overall demand for FSCs on international flights is expected to be depressed and this may result in many airlines being forced to reduce overall capacity until demand increases sufficiently.
With reduced overall networks worldwide, we believe that international alliances and particularly joint ventures are effective in maintaining and improving consumer convenience while simultaneously improving profitability, efficiency, and maintaining a competitive environment.
Has cargo become more important for you? Can we make cargo processes more efficient?
In the current situation where passenger flights continue to operate at reduced schedules and shipping demand networks are tight, we are responding to increased demand by operating passenger aircraft for cargo flights and forming alliances with other companies.
In the future, demand for items that are suitable for high-speed transport, such as e-commerce, pharmaceuticals, and perishables products, is expected to increase, and we would like to meet this demand.
In addition, to ensure the stable operation of the air cargo business in the future, we recognize the need to standardize various formats using new technologies and to improve productivity through labor saving and automation in the cargo handling area.
Did the Olympics have any impact on your business?
As the host country's airline and as an official airline partner of the Games, we believe that we were able to contribute to the safe and secure transportation of officials and participants, which helped lead to the success of the Games amid the ongoing pandemic.
Of course, demand for flights to the Olympics and Paralympics was significantly lower than initially expected, partly due to the fact that the Games were held without spectators, and partly due to the unique environment related to quarantine measures enforced at the time of entry to not just Japan but also when returning to the home country.
Are Narita and Haneda working well or do you need improvements from these airports?
Haneda functions as a domestic hub, while Narita functions as an international hub. Moving forward, Haneda is expected to further improve the convenience of inbound and outbound connections, and Narita is expected to improve convenience with the third runway planned for 2029.
How important is it for the industry to continue investing in technology and what technologies excite you most?
Maximizing the customer experience is particularly significant and we will continue to provide new value and services to customers. Just as important is maximizing the employee experience by creating a comfortable working environment for employees and improving operational quality and safety. We believe both are necessary to achieve sustainable growth and development and so will continue to invest in digital technology.
In particular, for safe flight operations, it is necessary to make more investments in online digital marketing and IT technologies, using big data analysis.
As a new field, next-generation air mobility, which is expected to be more commonplace in society in the future, is expected to utilize safety technology cultivated from airlines.
Furthermore, to reduce CO2 emissions from aircraft, it is extremely important to upgrade to fuel-efficient aircraft designed with new technologies and to invest in sustainable aviation fuels (SAF).
What more can be done to reduce aviation's environmental impact?
In response to climate change, in addition to the aforementioned upgrades to fuel-efficient aircraft and the use of SAF, the airline will aim to use renewable energy in its ground facilities.
Also, to reduce other environmental impacts, JAL will reduce the amount of single-use plastic used and take measures to minimize the amount of on-board food waste. Furthermore, then increased operation of quieter aircraft will also reduce noise levels in areas in close proximity to airports.
What is your view on the industry’s future? Will it be back to normal in a few years or will there be changes in passenger requirements, networks, ticket prices and so forth?
Post-Covid-19, we believe that there will be a portion of business-related travel that will be replaced by remote/virtual solutions and it will take some time to completely return to pre-pandemic levels.
However, we believe that the industry as a whole will recover and grow, in the shorter term the need for tourism and VFR is expected to increase with the growth of the global economy. In the future, as the needs of customers become more diversified, by offering safe and secure flights, we will build networks and set prices to meet such diversification.
What are the lessons learned for the industry from this crisis and have you learned anything personally about leadership in a crisis?
In a global society where people frequently move across borders, the recent pandemic has led many people to recognize or become aware of the risk of movement. But it has also triggered a new awareness of the importance of human interaction and the need to meet face-to-face and the value of movement. There are things that can only be done by moving.
Both the risk and the value of movement have become conspicuously apparent. Under these circumstances, the aviation business must find the balanced solution of how to reduce the risk and increase the value of travel.
As for leadership in a crisis, this requires many skills including the ability to promptly and accurately share information while events and situations are simultaneously evolving and changing on many fronts.
It is thus important to create multiple models and scenarios of what is likely to happen in the future and the processes and vision to overcome it. I believe that this will keep the team members highly motivated and enable them to face this and future crises as one.