Japan Airlines returns to freighter business

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Japan Airlines is going back to the future. Thirteen years after getting rid of its freighter business as part of a bankruptcy reorganization, the passenger carrier is reintroducing a dedicated cargo fleet in a strategic move to capitalize on growth opportunities in the cargo and mail sectors.

JAL said last week it will pluck three Boeing 767-300ER jets from its passenger fleet and send them to an airframe overhaul facility for conversion into pure freighters capable of carrying large containers on the main deck.

The airline began embracing cargo more seriously in December when it announced plans for low-cost subsidiary Spring Airlines Japan to provide flight services for logistics provider Yamato Transport, which is leasing three Airbus A321 converted freighters for domestic freight and parcel transportation.

JAL said it needs a freighter division to meet growing demand, especially for domestic and international e-commerce, on key trade corridors. The airline generates cargo revenue by selling space in the lower hold of passenger planes and chartering freighters during periods of high demand. Passenger airlines experienced a surge in cargo business at the peak of the COVID crisis when passenger service was limited and shippers were desperate for capacity to move goods.

In the fiscal year ending March 31, JAL's cargo revenue increased 3% to $1.7 billion versus the prior 12 months, but sales were 145% higher than in 2019. Cargo demand across the industry began to decline a year ago, and JAL said fourth-quarter revenue was down 28% year over year.

The three freighters will primarily be deployed to South Korea, China and other countries in East Asia, and eventually be offered on domestic routes and for nonscheduled charter flights.

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Yamato Transport and JAL both referenced a new law, scheduled to take effect next April, that limits the number of overtime hours truck drivers and couriers can log behind the wheel as a key reason for introducing domestic airfreight service. JAL also wants to ensure freight capacity across the nation as it downsizes its passenger fleet.

JAL and Yamato Transport are scheduled to launch their domestic air cargo service next April. The first A321 plane has arrived in Singapore to begin modification at an Airbus affiliate facility, FreightWaves confirmed.

JAL did not respond to questions about where the 767s will be converted. A Boeing spokesperson referred queries to JAL but neither confirmed nor denied that the Boeing program is doing the work.

The aircraft will be admitted for overhaul in sequence, with entry into service scheduled for late this year and continuing through the first quarter. A medium-widebody aircraft like the 767 takes at least five months to change its structure for cargo, and conversion shops face labor and supply chain pressures that are delaying delivery times.

Passenger-to-freighter conversions are complex engineering tasks involving the installation of a large cargo door, reinforced flooring and door jams, and a container handling system, as well as modifying electrical systems. Converted aircraft also must be certified as structurally sound by relevant aviation authorities. A 767-300 converted freighter can carry 24 pallets weighing up to 32 tons on the main deck and an additional 16 tons in the lower hold.

Japan Airlines operates 27 767-300 extended-range aircraft and is introducing large Airbus A350 airliners to upgrade its international passenger fleet.

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Before entering bankruptcy protection in 2010, JAL had three 767 production freighters.

JAL is the latest passenger airline to develop a stand-alone freighter airline and one of a handful, including Air Canada, to return to the freighter business. Fellow Japanese carrier All Nippon Airways is also beefing up its air cargo business with the planned acquisition of Nippon Cargo Airlines later this year.

More capacity entering the market could be a challenge for JAL, but the inter-Asia region also has growth potential as manufacturers that are spreading risk by locating factories outside of China will require logistics services to connect new supply chains.

In April, the airline's Narita Airport facility received a quality certification from the International Air Transport Association for safe and efficient handling of temperature-sensitive pharmaceutical shipments. JAL opened a refrigerated warehouse dedicated for pharmaceuticals at Narita in October. This summer the company plans to introduce a cold chain logistics system using refrigerated trucks for pharmaceuticals moving between Kansai, Narita and Haneda airports.

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