Following its emergence from bankruptcy protection, Japan Airlines has announced that it will be investing $6 billion in new planes. In an effort to cut down on fuel expenditure the carrier has placed an order with Boeing for its new Dreamliner 787 model which the manufacturer says is around 20 per cent more efficient than other planes of a similar size.
The airline is aggressively looking to improve its margins against increased competition. It has cut its workforce down by a third, pulled out of routes which were not making a profit, reduced operating expenses and modernised its fleet. The airline’s original operating profit target has now doubled to 180 billion yen.
Last month, JAL appointed a new president Yoshiharu Ueki. He said that he aims to have the company back into stable flight mode as soon as possible. Depending on the condition of the market, JAL could be in a position to raise as much as $6.5 billion if it relists in September.
However, experts predict that it could be difficult for the carrier to attract investors at a time when there is huge competition from rivals and attention remains focused on the problems in the eurozone. In order to tackle such challenges, JAL said it would be pushing 478 billion yen into investing in new aircraft and parts over the next five years.
The carrier is currently looking at replacing older planes with Boeing’s 737 and 787 models which the manufacturer claims are more fuel efficient than aircraft of a similar size currently in service.