Japan Airlines (JAL) will mainly rely on increased aircraft utilization to increase capacity and meet an expected demand surge in 2020, although its planned long-haul LCC startup will also help.

While exact targets are yet to be confirmed, JAL could potentially increase its international capacity by 10% in its 2020 fiscal year, airline president Yuji Akasaka said in a briefing at the IATA annual meeting earlier this week. This would be an acceleration from the 2.5% growth targeted for the 2019 fiscal year, which ends in March 2020.

JAL’s capacity growth will be prompted by government estimates that there could be 40 million international visitors to Japan in 2020, compared to 30 million in 2018. Japan is hosting the Olympics next year and more landing slots are set to be granted at Tokyo Haneda Airport. Industry observers expect slot allocations for Japanese carriers to be announced during the September quarter.

JAL is “very well positioned” to prepare for the demand increase next year, Akasaka said. The airline will not be increasing its fleet dramatically, and has enough aircraft in its current plan to cope with a 10% capacity rise. It has plenty of scope to raise utilization on the existing fleet, Akasaka said. Changing to a higher-density configuration on some aircraft types will also boost capacity.

The carrier’s planned LCC subsidiary Zipair will add another avenue for growth. The LCC is scheduled to launch next year with two Boeing 787-8s, with steady expansion in subsequent years.

Zipair will not just help with the 2020 growth target, but will also contribute to meeting longer-term government plans to boost visitor numbers to 60 million by 2030. Akasaka said long-haul markets in the US and Europe will be major sources of untapped traffic.

The JAL Group is currently the sole owner of Zipair, but the company intends to seek other investors at some point. Akasaka stresses such investors could come from outside the airline industry. There is no partnership in place between Zipair and JAL’s joint-venture short-haul LCC Jetstar Japan. However, Akasaka said there may be some potential for the two LCCs to work together in the future.

Another recent development for JAL is its new joint business agreement with Malaysia Airlines. The pair have applied to regulators in both countries to form a joint venture on routes between their countries. The pair will also cooperate in areas such as safety and management practices. Akasaka believes there is potential to eventually expand their codesharing beyond their respective gateways.

When asked if JAL might invest in Malaysia Airlines, Akasaka said this is “still under review.” While nothing has been decided, discussions are likely to occur on this subject.

In terms of fleet moves, JAL is scheduled to receive its first Airbus A350-900 on June 13. This aircraft will be used on the carrier’s domestic route between Tokyo Haneda and Fukuoka from Sept.1. The initial A350-900 deliveries are generally intended to replace the airline’s Boeing 777-200s on domestic flights.

Adrian Schofield, adrian.schofield@informa.com