Advice for JAL

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Just like British Airline, Japan Airline is in a big mess of deficit. Due to global economic recession, the demand for high service, high price seats went down as well as Japan Airline’s profit went down. Here are some of my advice for JAL:

  1. They should cut off high price seats such as business class and 1st class seats. Due to global economic recession, the demand for those seats have went down. Conversely, the demand for lower price seats such as economic seats went up.
  2. They should lower the price as much as possible. As the demand for high price seats went down, Japan Airline must make the seats available for a low price in order to ‘survive.’
  3. They should lower the labor cost. This might lower the quality of airline service, however, it is inevitable during the recession.
  4. They should get rid of unprofitable air-routes. By getting of those unprofitable, money-eating routes, it will significantly help Japan Airline financially. Instead, they should look for cheaper, but effective routes.
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3 Responses so far »

  1. 1

    oat17 said,

    Nice blog post Sang and I will have to agree with you on your solutions. Lowering the price will definitely increase the demand for seats on the aircraft. Ryanair is a great example of this. The price of their flights are low, making them more attractive to travelers. Cutting down on unprofitable routes is also a good idea. Good thinking Sang.

  2. 2

    Irfani said,

    Sang, your advices are very well thought out through. However, I believe that because JAL has a reputation of being the best Asian airlines for their luxurious goods, they should maintain that reputation and manipulate it to increase their revenue. Furthermore, what other advices can you give for JAL’s domestic flights?

  3. 3

    kaniks92 said,

    Hi Sang:)

    You seem to understand JAL’s current problem in the economic downturn very well and have identified effective ways in which JAL can resolve the situation they are in.
    I do agree that they should be finding as many ways as possible to decrease prices for consumers, but if they decreased the price of every factor affecting their revenue, they may not gain enough profit and be able to pay for other costs. It is important for JAL to know what factors are elastic and inelastic, so that they can be satisfied with the revenue that they receive, and so that the prices are affordable for their consumers.


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