JAL market share shrinks 2%

Posted on Nov 27 2000

The Commonwealth Ports Authority has been advised to strictly observe austerity measures to reduce operating expenses due to the significant fall in overall traffic count from Japan Airlines, which officials said are at a record-low in terms of growth.

A financial report obtained from CPA disclosed JAL’s market share shrink from 40 percent to 38 percent in the Fiscal Year 2000 which ended September 30, although the Tokyo-based airline company continues to hold the largest share of the tourism market.

Records from the ports authority revealed that arrivals from JAL flights jumped three percent in the last financial year to 203.454 passengers from the FY 1999’s 198,055, with departure figures also growing three percent in the same period.

On the other hand, JAL deployed an additional 55 flights between major cities in Japan to Saipan during the same period, increasing its landing count by seven percent from 779 in FY 1999 to 834 landings at the Saipan International Airport.

Finance managers of the ports authority have reasons to be wary about as JAL reported a 10-percent fall in total passenger count last month, apparently because of the controversial travel advisory issued by the Japan’s Ministry of Foreign Affairs in September.

“Since the traffic count from JAL through Sept. 30, 2000 was at record low, CPA should continue to observe and monitor the austerity plans to save and reduce operating costs,” the report prepared by Comptroller Dave S. Demapan said.

Arrivals from Tokyo dropped seven percent in October 2000 to 9,904 from last year of the same month’s 10,656 Saipan-bound travelers who were ferried by the Japanese flag carrier.

At the same time, Saipan-bound JAL passengers from Osaka caved in 12 percent from 5,481 in October 1999 to only 4,823 this year. The number of charter passengers plunged 43 percent from 572 to 326 last month.

However, the biggest drop in passenger traffic count was recorded from Continental Airlines by at least 17 percent or about 27,000 passengers during the last financial year compared with figures from FY 1999.

Continental Airlines also reduced its deployment of aircraft to and from the Northern Marianas by 32 percent or at least 686 flights, which pulled down overall landing count at the Saipan International Airport by 14 percent.

Asiana Airlines and Northwest Airlines exceeded their FY 1999 traffic count by 41 percent and 26 percent respectively.

Officials said this was primarily spurred by the Airline Incentive Program which grants 50 percent to carriers that are able to bring up arrival figures by 15 percent.

CPA last year implemented an incentive program granting 50 percent reduction in arrival and departure fees to CNMI signatory airlines that are able to bring up their arrival figures by 15 percent from their current traffic load.

To qualify under the CPA Airline Incentive Program, airline companies need not increase flights between Saipan and foreign countries but bring in more people through upgrade in equipment or increase seating capacity.

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