JAPAN AIR SYSTEM, LTD.: JAS M1 Building, 5-1 Hanedakuko 3-chome, Ota-ku, Tokyo, 144-0041, Japan; Phone 81 (3) 5756-4046; Fax 81 (3) 5756-0663; Http://www. jas. co. jn; Code JD; Year Founded 1988. On April 1, 1988, the former Toa Domestic Airlines Company,
Ltd. is renamed Japan Air System, Ltd. to reflect its new status as an international carrier and its receipt, the previous day, of its first Douglas DC-10-30. Chairman Isamu Tanaka’s 4,273-employee carrier maintains its huge domestic network of 66 routes to 38 cities. Charter services are also provided to destinations throughout Southeast Asia. The first two of four ordered DC-10-30s are used for training and charter flights while authority is awaited to begin Tokyo to Honolulu service.
Beginning in June, DC-10-30 service is inaugurated to Okinawa; in July, the first international flights commence with Airbus Industrie A300B2K-36 frequencies to Seoul, South Korea.
Passenger boardings jump 4.6% to 10,683,201 and freight is up by 9% to 49.29 million FTKs.
The workforce in 1989 stands at 3,991. In May, approximately $61.2 million is raised through the private placement of five-year convertible stock worth SFr 100 million.
The year’s enplanements total 12,227,722.
Company employment grows 35.3% in 1990 to 5,400 and the fleet now includes 50 aircraft. Beginning in April, company stock traded over the counter at the Tokyo Stock Exchange is listed. Additional funds from the listing will be employed to acquire additional aircraft.
Passenger boardings advance by 9% to 13,437,101, a figure 22nd largest among all airlines in the world. Freight climbs by 22% to 76.77 million FTKs.
Operations continue apace in 1991. When the Transport Ministry opens additional slots at Tokyo (HAD) on May 17, they are immediately assigned to Japanese carriers. JAS receives three domestic routes to Fukuoka, Kita-Kyushu, and Komatsu that it will begin on July 20. Meanwhile, on June 3, scheduled service is inaugurated from Tokyo to Honolulu.
The fleet in 1992 comprises 21 YAMC YS-11As (including 7 on lease to subsidiary Japan Air Commuter Company, Ltd.), 20 McDonnell Douglas MD-81s, 8 MD-87s, 10 DC-9-41s, 2 leased DC-10-30s, 9 Airbus Industrie A300B2K-36s, and 13 A300B4-203s. Orders are outstanding for 11 A300B4-622Rs, 5 Boeing 747-400s, 6 MD-81s, and 10 MD-90-30s.
On April 1, Japan Air Commuter Company, Ltd., employing the leased YS-11As, begins its first services from Itami Airport at Osaka. It takes over two routes from its parent, JAS, when it begins to provide four-times-a-day roundtrips between Osaka and Tokushima and daily roundtrips from Osaka to Tanegashima.
Having sustained losses with it since 1982, the company, also in April, abandons its helicopter business. Down from 10 helicopters a decade earlier to 2, the 16 pilots involved will be transitioned to the carrier’s fixed-wing fleet.
Statistics for the 5,400-employee company are reported only for the first half-year and show enplanements up 4.9% over the same period a year earlier, to 7,671,815. Freight rises 3.4% to 46.92 million FTKs. Revenues are $2.56 billion, but expenses are more. As a result, there are losses: $15 million (operating) and $49.3 million (net).
On October 1, employing its new SAAB 340Bs, Japan Air Commuter Company, Ltd. takes over the daily routes from Oita to Kagoshima, Kagoshima to Matsuyama, Matsuyama to Miyazaki, and Miyazaki to Nagasaki, which the parent had previously operated with YS-11As.
In 1993, Chairman Tanaka and President Takeshi Mashima oversee a workforce of 5,669, up 1% over the previous year. The number of YS-11As is reduced to 19, although the number chartered to Japan Air Commuter Company, Ltd. is increased to 9. The number of MD-81s is increased to 23.
After six months of twice-daily operations over the Tokyo-Osaka route, the East Japan Railway Corporation and Tokai Railway Corporation on March 18 boost their Nozomi (Hope) bullet train trips to hourly. Two days later, in the face of this stiff competition, the airline is forced to cut its daily roundtrip frequencies in half, from two to one.
Hoping to compete with discount travel agents for customers, the airline now begins to introduce more services for passengers paying full-fare for economy-class tickets on international flights. In March, for example, presents of wines, spirits, and handicrafts are offered to passengers boarding at Tokyo (NRT) for flights to Singapore, Honolulu, and Seoul. They also receive discounts on car rentals and a hotline for making reservations at affiliated hotels. On Singapore and Honolulu flights, passengers may also choose between baggage delivery service or a free limousine bus ticket from Narita Airport to anywhere in the Tokyo area.
Flight 451, a DC-9-41 with 4 crew and 72 passengers, is caught by wind shear while putting down at Hanamaki on April 18 and lands hard, skidding 1,860 m. Fuel spills and the Douglas catches fire, but all aboard are safely evacuated before it is destroyed by the flames.
Also in April, a four-year restructuring program is announced. Its provisions include a ? 100 billion ($880 million) reduction in capital spending by the indefinite postponement of its ordered Dash-400 Jumbojets and a switch from that type to the new B-777. A new employment system will be introduced, including job displacements and labor reductions. In addition, planned construction of maintenance buildings, new hangars at Tokyo (NRT) and Osaka (KIX) and the purchase of upgraded computer systems are put off.
In October, further cost cutting is announced, designed to save ? 5 billion (US$50 million) the following year. Smaller aircraft will be employed and service will be suspended altogether on a quarter of the company’s 74 domestic routes. In addition, company offices will be moved to the downtown Tokyo headquarters to cut down on rental expenses and subsidies paid to Japan Air Commuter Company, Ltd. will be gradually eliminated.
Like other Japanese carriers, JAS also suffers a recession-induced downturn. Although passenger boardings inch up 0.5% to 15,018,000, freight falls 10.3% to 878.73 million FTKs. On income of $2.58 billion, the company’s net loss increases to $103.8 million.
The employee population falls 8.3% in 1994 to 5,200. To combat a continuing poor performance, in February the carrier’s leadership undertakes the restructuring program announced in April of the previous year, with revisions. It includes the elimination of unprofitable routes, deferral of investments in new aircraft and facilities, and staff reductions.
The unprofitable Tokyo-Honolulu routes are suspended in June, bringing to 23 the number of unprofitable segments suspended or reduced in a year. A number of thinner routes are transferred to Japan Air Commuter, but 14 domestic flights are scheduled from the new Osaka Airport (KIX) when it opens in early September.
Operations continue apace during the remainder of the year and plans are made in the final quarter to discontinue service to Singapore during the upcoming spring. Beginning in November and just in time for Christmas, the company’s in-flight catalog begins to offer $600 golf clubs (putters) made from recycled B-747 engine fan blades. Late in December, the Transport Ministry relaxes airfare regulations.
Overall, customer bookings recover, growing by 3.1% to 15,352,618, and cargo moves ahead by 2.1% to 106.79 million FTKs.
There is no change in company employment numbers during most of 1995. The carrier continues to reduce its international services, discontinuing its Tokyo to Singapore route in April. At this point, Tokyo to Seoul is the only international route flown.
Jointly sponsored by the airline and the nation’s second largest travel agency, Kinki Nippon Tourist Co., Ltd., Peter Pan Flight charters are inaugurated on September 2, initially from Sendai to Honolulu. The service, designed to support fund raising for the Tokyo branch of the international Peter Pan Children’s Fund, is provided by a DC-10-30 painted in a special Peter Pan livery.
Traffic figures are reported through September and show passenger bookings accelerating by 9.7% to 12,568,182. On the other hand, freight falls by 7.2% to 72.46 million FTKs. Later in the fall, JAS hires 150 contract flight attendants.
The first of 10 ordered MD-90-30s is turned over during a Long Beach ceremony on December 19; it is the first of its type to be delivered outside of the United States. It is also the first to wear a special livery conceived by famed Japanese motion picture director Akira Kurosawa that highlights the seven colors of the rainbow.
Airline employment surges 15.7% in 1996 to 6,015 and the fleet now includes 78 aircraft. The premier MD-90-30 flies from Long Beach to Tokyo (HAD) via Honolulu and Saipan on January 6-9.
Beginning in March, the company agrees to modify its jetliners to include, for the first time, separate men and women’s lavatories. On March 8, the carrier’s last YS-11A service is flown from Nanki-Shirahama to Tokyo (HAD). Beginning in April, the withdrawn YS-11As are sold, including several to Air Philippines (2).
By the end of the first quarter, the DC-10-30 supporting the Peter Pan Flight has conducted a total of 21 charter flights to Honolulu, Brisbane, Wuhan, and Bali from Tokyo, Hiroshima, Nagoya, and Miyazaki.
The first MD-90-30 in its rainbow livery enters service from Tokyo (HAD) to Nagasaki on April 1. When the new aircraft featuring male and female bathrooms begin flying during the summer tourist season, a “lavatory war” begins. Japan Air Lines Co., Ltd. (2) now matches JAS by installing “super lavatories” in the first-class sections of certain B-747-446s.
On July 1, via its computerized reservations links with Northwest Airlines, the carrier begins accepting transpacific feed at Osaka for its routes to Sapporo, Fukuoka, Kochi, and Niigata. The same four cities feed Northwest flights to Honolulu and Los Angeles, with JAS able to issue through-tickets to U. S. cities beyond the California gateway.
The first B-777-289 is delivered on December 1. A contest is held over the Internet for the aircraft’s livery; from entries by 10,000 participants, a design by a 13-year-old boy is chosen the winner.
Although one month is missing from its annual report to ICAO, JAS announces traffic figures for the full year.
Enplanements for the 11 months are up 6.4% to 12,936,599 and 77.23 million FTKs are operated, a 4.1% increase. Revenues total $2.65 billion, while expenses are $2.64 billion; there is a $2.3-million operating profit and a net gain of $1.4 million.
The workforce is cut 3.4% in 1997 to 5,223. The charter and domestic subsidiary Harlequin Air Company, Ltd. is established at Tokyo on January 20. JAS provides ? 480- million initial capitalization.
In March, the Ministry of Transport announces that JAS will receive 12 new slots that will be made available at Tokyo (HAD) following the summer opening of a new runway.
On April 1, the B-777-289, painted in the prize-winning “spiral rainbow” color scheme, inaugurates service with frequencies from Tokyo to Fukuoka and Sapporo. Following up on the concept first employed by Western Pacific Airlines (Westpac) in the U. S., President Hiromi Fun-abiki authorizes the country’s first “logojet.” The livery of the initial aircraft, an A300-622R, is sponsored by Otsuka Pharmaceutial Company, Ltd., which produces Japan’s third most popular soft drink, Pocari Sweat.
In May, the company signs an agreement with Japan Air Lines Company, Ltd. (2) to cooperate in the area of domestic frequent flyer programs.
A total of 155 domestic flights are cancelled on June 27 by JAS, Japan Air Lines Company, Ltd. (2), All Nippon Airways Company, Ltd., Air Nippon Company, Ltd., and Japan Transocean Airways Company, Ltd. as the result of a tropical storm and tornado.
A commercial agreement is signed with Northwest Airlines on July 17 under which the two carriers, in November, will link their frequent flyer programs. The two agree to study other possible joint operations, including airport handling, marketing, and even code-sharing.
Also during July, President Funabiki announces that the carrier’s 100-point domestic network is under review as only a third of the destinations visited are profitable. An increase in service to China is also contemplated.
The Pocari Sweat logojet is unveiled at Tokyo (HAD) on September 1 and begins service to Okinawa, Sapporo, and Fukuoka. During the month, negotiations are undertaken with KLM (Royal Dutch Airlines, N. V. concerning the possibility of a cooperative agreement. A memorandum of understanding is signed with the Dutch major in October; the two airlines will cooperate in commercial areas.
A letter of intent is signed with Midwest Express in October via Dolphin Trade & Finance, Ltd. for the sale of eight MD-81s. Deliveries to Midwest will begin in December and continue through 1999.
A code-sharing agreement with KLM (Royal Dutch Airlines, N. V.) is signed on October 28; the arrangement, when it takes effect in February, will also include cooperative marketing, joint ground operations, and a joint frequent flyer program.
The alliance with Northwest Airlines takes effect on November 1.
The charter subsidiary Harlequin Air Company, Ltd. completes its first flight, to Brisbane, on December 19.
Customer bookings slide 3% to 17,435,656, but cargo increases 17.1% to 121.47 million FTKs. Still, costs are so high that a loss of ? 1.5 billion is suffered.
At the beginning of 1998, JAS is the 18th largest airline in the world in terms of passenger boardings. Airline employment stands at 6,095 and the fleet, all of which is Stage III certified, includes 86 airplanes: 3 B-777s, 34 A300s, 1 DC-10-30, 34 MD-80s, and 14 MD-90-30s.
The dual-designator pact with KLM (Royal Dutch Airlines, N. V.)
Begins on February 1. As the result of losses suffered over the last several years and the Asian economic downturn, JAS, at the end of the first quarter, begins to implement a number of new cost-cutting measures.
In addition to a hiring freeze, it is announced that the company will cut its workforce by 500 over the next 3 years, suspend pay increases for managers, and restructure the domestic route network so as to emphasize only the most important routes. To save $4 million in annual rent, it will transfer its headquarters to Tokyo (HAD).
Additionally, executives resolve to join their colleagues at All-Nippon Airways Company, Ltd. (ANA) and Japan Airlines Company, Ltd. (2) in taking a tough stand against the pilot’s unions, finally cutting the practice of paying flyers for 65 hours of flight time a month regardless of actual flight time.
Hokkaido Air System, Ltd. is established during the first quarter as a joint venture between JAS (51%) and the Hokkaido prefectural government (49%). Takeshi Kandi is named president and revenue operations begin with a pair of leased SAAB 340Bs. Destinations visited include Asahikawa, Hakodate, Kushiro, and Sapporo.
When the new pilot flight time and benefit package takes effect on April 1, pilots at All Nippon Airways Company, Ltd. (ANA) go out on strike. Those at JAL and JAS do not, but neither do they agree with management’s plan to cut their pay. Continuing to voice their displeasure, the pilots threaten to walk out on April 9-10, a move that will force the airline to cancel 454 domestic flights. At the last minute, there is no strike.
The crash of a USAF F-16C at Misawa in northeastern Japan on July 24 forces a brief closure of the joint civil and military airfield. JAS must cancel four flights. Service is otherwise continued during the remainder of the year. In October, JAS announces that it will gradually transfer its international operations to Harlequin Air Company, Ltd.
On December 28, the carrier announces that it will slash airfares on the Tokyo to Fukuoka route by 50% on March 1 and by 40% on the Tokyo to Sapporo service.
Customer bookings accelerate 11.9% to 19.51 million, while cargo traffic jumps 10.6% to 134.33 million FTKs. Revenues rise 2% to $2.6 billion.
As part of a master plan to reduce costs, salaries for cockpit crew are cut by 3% in January 1999; pay cuts of 12% will occur in April 2001.
On February 24, JAS and Japan Air Lines Company, Ltd. (2) agree to share a common computerized reservations system for their domestic route scheduling. The pact between the two airlines in the first such arrangement in postwar Japanese commercial aviation history.
As the result of stiff competition from Skymark Airlines Company, Ltd. and Hokkaido International Airlines Company, Ltd. (“Air Do”), JAS, on March 1, reduces its ticket prices on the Tokyo to Fukuoka service by 50% and on its route from Tokyo to Sapporo by 40%.
Twice-weekly return service starts on March 28 between Osaka and Kunming, China.
Demanding better working conditions and an end to wage cuts, JAS pilots begin an eight-day partial strike on April 14. Services from Tokyo (HND) to Sapporo, Osaka, Kushiro, Tokushima, Kochi, Takamatsu, Pukuoka, Hiroshima, Kumamoto, Oita, and the Amami Islands are affected. Thirty domestic flights are cancelled on April 21 as the partial job action continues for another few days.
The slashing of fares on those services flown in competition with Skymark Airlines Company, Ltd. and Hokkaido International Airlines, Ltd. begins to show results by the end of April. Both Skymark and Hokkaido show huge 60+% drops in their load factors over the contested routes.
The marketing alliance with Northwest Airlines is enhanced on August 7 when the two companies begin code-sharing. The “JD” code is placed on Northwest nonstop roundtrips between Osaka (KIX) and Detroit, Minneapolis (MSP), Seattle, Los Angeles, and Honolulu, while the “NW” designator appears on JAS connecting service from Osaka to Fukuoka and Okinawa.
CNN, quoting the Yomiuri newspaper, reports on August 29 that JAS and Japan Air Lines Company, Ltd. (2) have come to an arrangement under which they will jointly run international services. Beginning in October, JAL will provide aircraft and JAS will allocate three of its Tokyo (NRT) arrival and departure slots for services to either the U. S. or Korea.
Passenger boardings rise 5.5% to 20,597,000, while cargo jumps 21.3% to 162.94 million FTKs.
Airline employment at the beginning of 2000 stands at 5,994, a 1.6% decline. The company now operates seven B-777-289s.
On February 1, the Japanese government announces a new round of domestic airline deregulation. This significant step removes all entry and exit restrictions and also eliminates the upper and lower levels of ticket prices. JAS and its competitors now increase unrestricted tariffs an average of 15%, while instituting deep-discount restricted prices
While landing in a snowstorm at Aomori in northeast Japan after a March 9 flight from Osaka, Flight 751, an MD-81 with 159 passengers overruns the runway and ends up in a snow bank. No injuries are reported.
A series of DC-10 charters undertaken on its behalf by Harlequin Airlines Company, Ltd. end on March 27.
On July 13, it is announced that to cut costs, JAS will share passenger handling services for domestic flights with Japan Air Lines Company, Ltd. (2) at important off-airport sites beginning in the spring The two will also introduce joint gate boarding card machines in 2002.
With the united goal of gaining some of the 85% market share held by the Shinkansen “bullet train,” JAS joins with All Nippon Airways Company, Ltd. and Japan Air Lines Company, Ltd. (2) during the second week of August to inaugurate 33 daily roundtrip shuttle flights between Tokyo and Osaka (KIX and ITM). Start-up of the joint venture has unavoidably been delayed six weeks.
An A300B4 is forced to return to Naha for an emergency landing on August 9 when ground observers report seeing flames coming from its No. 2 engine.
A code-sharing agreement is signed with China Southern Airlines Company, Ltd. on September 22 covering service over a route from Guangzhou and Osaka (KIX).
JAS, Japan Air Lines Company, Ltd. (2), and All Nippon Airways Company, Ltd. open joint check-in counters on September 23 to handle passengers using their roundtrip shuttle service between Tokyo and Osaka (KIX).
Also in September, Japan Air Lines Company, Ltd. (2) begins to provide ramp handling and cargo support services for JAS under contract at Osaka (KIX) for both domestic and international services.
At the end of the year, all employees prepare to celebrate the company’s 30th anniversary beginning on May 15, 2001. Throughout the year, a special “birthday fare” will be available—any passenger flying within 15 days of his or her own birthday may purchase a one-way $86 fare to any point on the JAS domestic system.
JAPAN AIR TRANSPORT COMPANY, LTD. (JAT) (NIHON KOKYUSO KABUSHIKI KAISHA): Japan (1928-1938): Aircraft designer Seibei Kanwanishi forms Nihon Koku Kabushiki Kaisha (NKKK) or Japan Airways Corporation (JAC) at Osaka in July 1923 to operate a holiday charter service to Beppu, Kyushu.
Japan’s first civil aviation law takes effect on January 1, 1927 and, employing a Dornier Wal flying boat christened Naniwa, under the direction and sponsorship of the government’s Ministry of Posts and Communications, NKKK’s first scheduled service is inaugurated on July 1 from Osaka to Fukuoka.
The government-sponsored Nihon Kokuyuso Kabushiki Kaisha (NKKK) or Japan Air Transport Company, Ltd. (JAT), is formed as a national flag carrier, administered by the Ministry of Posts and Communications, on October 30, 1928. With capitalization of ? 10 million, orders are placed on its behalf for 8 U. S.-made Fokker Model 8 Super Universals and 10 Dutch-built Fokker F-Vnb/3ms as the original NKKK stands down.
Together with Tozai Teiki Koku Kai (TTKK) founded in January 1923 and recipient of a commercial operator’s certificate a year later, JAC is merged into NKKK in late winter 1929. In exchange for a ?11-million subsidy to be spread out over the next decade, the company is required to sign a contract allowing the Army free use of the carrier in times of emergency. In exchange, it is provided with 18 Salmson 2-A-2s with which to initiate services.
Sendai to Fukuoka via Tokyo and Osaka Salmson biplane cargo and mail service is inaugurated on April 1. The crated Super Universals arrive in June; after they are assembled and special pilot training is completed, one is test flown over the Korea Strait from Fukuoka to Pusan, Korea, on June 21. The Model 8s launch daily roundtrip passenger flights Tokyo to Fukuoka via Osaka on July 15.
Late in July, the first F-Vn/3ms arrive from the Netherlands; they are employed to begin thrice-weekly service from Pusan to Seoul to Darien via P’yongyang, on September 10. These flights are so well received that the Nakajima and Kawasaki aircraft manufacturers acquire licenses to build Super Universals and Dornier Wals for the company.
A total of 2,755 passengers are flown on the year.
With a Kawasaki-built Dornier flying boat, a proving flight is made from Fukuoka to Shanghai on March 7, 1930. The year’s enplanements more than double to 7,642.
The first group of stewardesses (“Air Girls”) is employed in February 1931. On August 28, the base of operations is transferred from Tachikawa to newly opened Haneda Airport. The Manchurian Incident occurs on September 18; two days later and under Army direction, JAT dispatches several Fokker Super Universals and their crews to Shenyang to help with military requirements, including resupply flights and the evacuation of wounded soldiers. This is the first mobilization of civil aircraft crews by the Japanese Army or Navy. In December, the company begins provisional scheduled services on behalf of the Army and the Darien route is extended to Mukden via Sinugi and on to Changchun, on December 28. Bookings slip to 6,766.
The Shanghai incident occurs in January 1932 and the colony of Manchukuo is created on March 9. NKKK supports the formation of Manchurian Air Transport Co., Ltd. (MAT) on September 26 as a joint venture between the Manchukuo government and Japanese business interests. When a Super Universal, engaged in an Army liaison flight, makes a forced landing in Manchuria the next day, all eight aboard are killed by Chinese irregulars. The deaths mark the first for JAT in service to the military. MAT commences operations on November 3.
Thereafter, JAT is able to concentrate on civil flying for some time and passenger boardings subsequently rise to 10,716.
The installation of 16 airway beacons between Osaka and Tokyo is completed in September 1933, allowing one of the carrier’s 8 new Naka-jima P-1s to initiate nightly airmail runs over that route beginning on November 1-2. The route is marked by powerful searchlights; not immediately successful, it is soon suspended. Enplanements for the year are nearly level at 10,992.
The manufacturer Nakajima Hikoki KK, on March 27, 1934, pays $80,000 to purchase a license to build Douglas DC-2s. The first DC-2 is delivered to Tokyo (HAD) on November 22, and in December, Naki-jima, having acquired manufacturing rights, begins to modify the aircraft’s plans into the AT-2 (also known as the Ki-34), the first Japan-built twin-engine commercial transport built to a primarily original design.
Customer bookings swell to 12,187.
On April 1, 1935, daily airmail flights commence between Tokyo and Changchun, capital of Manchuria, by way of Darien. The nightly airmail service via the lighted airway between Tokyo and Osaka is resumed with the coming of spring, while passenger and cargo frequencies to Darien become daily. Several speedy Airspeed Envoys, imported from the U. K., enter domestic service during the summer. Fukuoka to Taipei, Taiwan F-VII/3m service is inaugurated via Okinawa (Naha), on October 8. A number of additional Airspeed Envoys, license built in Japan as the Mitsubishi Hina Zuru (Young Crane) replace the Fokkers on home service.
Unhappily, the year’s boardings drop to 10,822.
The first of 33 production AT-2s is completed in January 1936, while in February, four crated DC-2s received under the 1934 contract are assembled. These Japanese and American units are placed into service on company routes, including that to Taipei, beginning on September 12 replacing the Airspeeds and Mitsubishis. A Beech C-17E, the first of 14 imported from the U. S., is also placed on local routes in September.
On October 1, new AT-2 routes are opened from Tokyo to Niigata and to Osaka via Toyama; from Osaka to Matsue via Tottori; and to Kochi via Tokushima. A scheduled route network is also begun on the island of Taiwan, with service extended from Taipei to Kao-hsiung and Hualien.
A commercial aviation bilateral agreement is signed with Germany on November 25.
These capacity and route improvements have a positive impact on the carrier’s traffic and financial reports; enplanements leap to 18,955.
Regularly scheduled Tokyo to Sapporo flights, made via Sendai and Aomori, commence on April 1, 1937. The route network from Tokyo now includes Sendai, Aomori, Sapporo, Nigata, Toyama, Nagoya, Tot-tori, Tokushima, Kochi, Osaka, Matsue, and Fukuoka in Japan; Taipei, Yilan, Hualien, Taizhong, Tainan, and Naha in Taiwan; Tianjin in China; Ulsan, Taegu, Seoul, P’yongyang, and Sinuiju in Korea; and Shengyan, Darien, and Changchun in Manchukuo.
On June 1, AT-2s launch express service from Tokyo to Changchun via Fukuoka and Seoul.
The Sino-Japanese conflict breaks out on July 7 and on July 12 the company dispatches aircraft and crews to China under Army direction. A block-seat agreement is signed with the military, covering payment for reserved seats (filled or not) on all flights from Japan to China or Manchukuo.
In the fall, Nippon Koku Yuso Kenkyujo, founded in 1922 and known as the Japan Air Transport Research Institute, is taken over and merged. Orders are placed for 30 Lockheed Model 14s and during the year the Japanese Army Air Force begins to receive AT-2s under the designation Type 97. Flights from Taipei to Shanghai commence on October 2. The first of seven Douglas DC-3s to be delivered over the next year arrives on December 6.
Passenger boardings increase to 47,432.
The trading organization Mitsui & Co., Ltd., covertly acting on behalf of the Imperial Japanese Navy, acquires a $90,000 license on February 24, 1938 to build the Douglas DC-3 in Japan. Two crated DC-3As will be shipped to Tokyo from California, where they are assembled by the Showa Hikoki Kogyo KK and allow the airline and its successor to test them. Rising Sun airplane builders, led by Showa Hikoki Kogyo KK and Nakajima Hikoki KK, will eventually construct 414 modified Douglas transports, designated Type O.
In March, the North Chinese route network is completed with the inauguration of new services from Fukuoka to Peking via the Shantung Peninsula community of Tsingtao. At the same time, flights begin from Shanghai to Nanking.
In April, newly organized International Airlines Co, Ltd., created the previous August as a subsidiary of the Army-backed MAT in Manchukuo, receives two Heinkel He-116s from Germany; the pair arrives at Tokyo from Berlin in a 5-day, 23-hr., 43-min. flight. The announced plan for the aircraft is to begin mutual air service between Tokyo and Berlin, but this will not materialize. The real, although covert, intention of the flight is to establish a basis for military aerial collaboration in case of emergency.
The same month, the Ministry of Posts and Communication begins large-scale training of civilian pilots. The Imperial Navy, meanwhile, begins planning for its own “civilian” airline, an operation to be known as Oceanic Airways, Ltd.
JAT receives its first L-14WGs in June and July and they are employed to commence Tokyo to Changchun operations on August 1. Another 119 Model 14s will be built in Japan and designated Type LOs. On Taiwan, the coastal communities of Taichung, Makung, Pingtung, Taitung, and Giran now all receive air service from Taipei.
JAT is now peaking in size. With a workforce of 1,500 and 80 transports, it operates a 12,800-kilometer route network with destinations in Japan, Korea, Taiwan, China, and Manchukuo. A DC-3 imported from the U. S. is assembled at Tokyo (HAD) on September 30; it opens routes from Tokyo-Peking and Fukuoka-Nanking on October 5. In late fall, the first three of 24 Mitsubishi G3M2s, converted to civil standard, are acquired.
A rivalry occurs between the Army, Navy, and Ministry of Communications for control over the nation’s civil airline. Despite the huge military payments that bring an end to the need for subsidy, payments to the airline continue because none of the agencies involved can agree to halt them. In November, a compromise is struck whereby International Airlines Co., Ltd., the still-paper Oceanic Airways, Ltd., and JAT will be merged into an entirely new carrier. JAT ceases operations on November 30 to make way for the establishment of Japan Air Lines Company, Ltd. (1) (Greater Japan [Dai Nippon Kokyuso Kabushiki Kaisha] Air Lines) the next day.
World History
