ATN: What are 2-3 things about your airline you expect your customers to be excited about?
MO: I believe our customers are looking forward to new and innovative services from JAL as promised in our Mid-Term Management Plan from FY2012-2016.

-For instance, new onboard products such as full flat beds in business class in the near future.
-JAL will also be offering the latest onboard internet connection service between New York and Tokyo in July (2012). We have also been tying up with well-established brands to offer refreshing in-flight services such as meals and duty-free items so customers can look forward to the next collaboration.
-We believe customers will also be happy about our fleet of younger, more efficient aircraft such as the 787s and 737s. We are scheduled to receive 38 new planes by the end of fiscal year 2016.
-In terms of destinations too, our customers can look forward to the convenience of nonstop flights to new places such as Boston and San Diego, as well as our new service Helsinki.

ATN: From many industry surveys, it appears that airlines’ top focus areas are ancillary/merchandizing, mobile and alliances. Can you tell us more about how you are approaching these? Or do you have different focus and strategies?
MO: JAL does not make ancillary revenue from charging our customers for services such as seat selection, onboard meals, check-in baggage etc., unlike LCC.

We are always pursuing convenience for our customers in various aspects, ranging from improving mobile services to expanding our network through closer cooperation with partner airlines within the oneworld alliance as well as bilaterally.

JAL recognized the value of utilizing mobile phone technology early on, and was a pioneer in introducing the Touch & Go boarding system in 2005 which enabled customers to go through boarding using their mobile phones instead of with a printed boarding pass. In April this year, we also introduced a new mobile phone application that allows our customers to conveniently make domestic flight and hotel package reservations.

In terms of alliance strategies, JAL recognizes that the competition these days is no longer constraint to between individual airlines but between alliances. oneworld comprises reputable, quality carriers and we intend to work closely with our partners to together, bring our customers greater benefits.

ATN: Technology continues to play a big role in helping airlines globally. What are some examples of how technology has enhanced the way you do business, and perhaps share some challenges you face with technology?
MO: In many ways, technology has helped us enhance our customers’ travel experience with JAL. For instance, JAL was first to introduce the Touch and Go service back in 2005 - a boarding system that allows IC (Integrated Circuit) cardholders to board domestic Japan flights without a paper boarding pass so there is no need to queue at an airport check-in counter or to use a self check-in machine.

Another example is how with technology, light-weight composite materials could be used to make up to 50% of the 787 aircraft, improving its fuel efficiency and extending its long-range capability. Additionally, the cabin environment is also enhanced with higher humidity and lower cabin altitude, making it more comfortable for customers.

Nearly ten years ago, JAL had once launched an onboard Internet service from 2004 to 2006. However, as technology then were not yet sufficiently developed and customer needs were low, the service provider to JAL eventually decided to suspend their operations, and JAL had to end the service. Now, over the last few years, the number of mobile phone and computer users has increased, correspondingly raising the demand for onboard connectivity. With the growing demand and technological development in this area, we found a suitable provider in Panasonic Avionics Corporation to once again offer onboard Internet connectivity.

ATN: Fuel is listed as one of the top concerns for airlines in the region. Are there are other areas or things that keep you up at night?
MO: In addition to the Eurozone debt crisis, Japan’s stagnant economic growth and the change in competitive environment due to the entrance of LCCs in the region.

The airline industry is vulnerable to unpredictable external risks that are beyond our control, such as war, conflicts and epidemics. We need to constantly pay attention to our surroundings and be ready to cope with any risks.

ATN: What are your reactions to IATA’s forecast that airline profitability will hit an all-time low in 2012? Are you taking any steps to ensure profitability for your airline?
MO: JAL will persevere in building up a strong resilience against any future event risks. Without any compromise to utmost safety in flight operations, we will strive to improve productivity and reduce cost by eliminating redundant expenses and maximizing the efficiencies of management resources.

At the same time, we will make structural reforms and raise the level of employees’ consciousness for profitability by introducing the divisional profitability management system. We will strengthen our efforts to build a solid financial base so that we can respond swiftly and with agility to changes in our operating environment.

ATN: What do you think your airline will look like 10 years from now?
MO: Based upon a sound financial groundwork, everyone at JAL will be working in unity towards achieving the management targets listed in our Mid-Term Management Plan, with a goal of becoming Japan’s and the world’s favorite airline of choice.

ATN: What will be impact of the JAL and IAG's antitrust business agreement?
MO: The ATI between JAL and IAG will allow JAL and BA to enter a joint business agreement, which will enable us to offer customers greater benefits and options, such as smoother transfers owing to co-locations of terminals at key airports. Both airlines will be able to work closely to improve and expand our services.

ATN: Will Jetstar Partnership and Peach have any impact on JAL in terms of the domestic market?
MO: By August, there will be 3 LCCs including Jetstar Japan and Peach operating in Japan. We expect that they will attract first-time flyers and carve out new demand for air travel, more so than they would cannibalize existing demand.

While we acknowledge there would be a certain number of JAL customers who would shift to taking LCCs, we do not think that would have a huge impact. In fact, we are not seeing any drastic changes in demand on routes that are now also being operated by Peach.