Asian Brand in Chaos: Japan Airlines files for bankruptcy, what’s in store for Delta and Skyteam? As shared Live on CNBC

So, we all know that Japan Airlines has filed for bankruptcy, is de-listing from the Nikkei Stock Exchange, will be selling all 30 Boeing 747s, shedding 30% of their staff and has hired a new CEO who used to be a monk. But what is the impact of all this? And where does a potential deal with Delta Airlines and Skyteam fit in the scheme of things? What happens to Oneworld?

I answered these questions and more during my Live interview with CNBC’s Worldwide Exchange today. I’m sharing the 5 min interview video below and would love to hear your thoughts on my take. (Click here if you cannot view the video)

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Shashank Nigam

Shashank Nigam

Shashank Nigam is the CEO of SimpliFlying and a globally sought-after consultant, speaker and thought-leader on airline branding and customer engagement strategy. He is also the youngest winner of the Global Brand Leadership Award and has addressed senior aviation executives globally, from Chile to Canada and from Sydney to San Francisco.Shashank's perspectives have found their way into major media outlets, including CNN Travel, CNBC, MSNBC, Bloomberg UTV, Mashable and in leading publications like Airline Business, ATW, Aviation Week, and others.Shashank studied Information Systems Management and Business Management at Singapore Management University and Carnegie Mellon University. Hailing from India, he splits his time between Singapore and Vancouver, among other cities.
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Showing 11 comments
  • oussama
    Reply

    I agree One World will suffer for the loss of JAL to Sky Team, and One World may have to look at a Chinese Carrier to fill the gap. From a JAL point of view I am not sure how moving from one alliance to the other will help its recovery, in all cases it will lose international long range flights. It will consolidate Delta's grip on Narita, which may be a political and cultural minefield. One winner is definitely ANA and Star alliance.

  • Cranky Flier
    Reply

    I’m sorry, Shashank, but I have to disagree with much of what you said.

    JAL doesn’t need Delta and SkyTeam or American and oneworld to rescue it here. That’s simply a matter for them of looking at what the best partnership is once they’ve restructured so they can be successful as an ongoing entity.

    You say that JAL is getting rid of its long haul fleet by retiring its 747s but that’s not the case. They have orders for 7 777s and 35 787s, so they are simply downsizing the long haul fleet. That was their plan anyway – this likely just speeds it up. Yes they will pull out of some routes, but that’s hardly getting rid of the long haul fleet.

    You then say that you think Delta is interested in JAL’s newer aircraft and slots at Narita. Delta has plenty of slots at Narita, as you note later, and they don’t want JAL’s aircraft. For Delta, it’s an opportunity for them to improve feed into their own Tokyo operation and potentially kill off some of the worse-performing routes to let JAL handle them instead. (I bet we’d see the 757 fleet based in Japan go away.) That improves how things look on their remaining flights and it lets them expand coverage in North Asia where they already have a strong presence.

    I don’t think that the CEO being an ex-monk in any way assures Delta. This new CEO has absolutely no airline experience, and that has to be a big concern. While that doesn’t mean he won’t do a good job, I don’t think anyone should be assured by this.

    Also, you say that American is concerned because they’d be losing the Japan to South America routes. I hardly think that’s their biggest concern. American will continue to fly to Japan’s largest cities on its own, and it will be able to feed its own South America operation from those cities. The bigger concern should be going beyond those smaller cities to other North Asian points. They lose a lot of feed on that end from JAL.

    Korean Air (not Korean Airways) is an interesting wildcard here, but I’m confused by your claim that they are a large domestic carrier. While they do have plenty of flights between Korea and Japan, they don’t fly within Japan. They also can’t sell connections over Incheon for flights within Japan. You think they stand to gain a great deal here, but I think they must be extremely concerned. If JAL joins SkyTeam, then that relegates Korean to a secondary carrier in North Asia for the alliance. It wouldn’t surprise me to see them leave for oneworld at some point.

  • Alain
    Reply

    Well done Shashank!
    Skyteam now gets a majority share on US-Japan traffic flows and Delta has vast xp in Japan thanks to former Northwest staff based in Tokyo. Next step: ATI and a JV!

  • Walter White
    Reply

    Efficiency and productivity will hopefully be a result. I travel Domestic flights on ANA and JAL every month. At a gate for a wide-body domestic departure, it is not unusual to see 4-5 agents working the flight. In the USA you would usually see 2 agents. I also recently watched as I tried to purchase last minute Business Class tickets Honolulu-Tokyo on JAL. The ticketing process was so disjointed. It took 3 people and 2 different computer systems to generate the ticket and boarding pass. JAL has some serious inefficiencies in their business and need this kick in the pants to redesign their business processes.

  • White file cabinet
    Reply

    This is so interested! Where can I find more like this?

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