Service Scheduled Between Tokyo and L.A., Washington : All Nippon Airways Comes to U.S. in July

When All Nippon Airways, the world’s sixth-largest airline in number of passengers, opens routes to Los Angeles and Washington in July--becoming Japan’s second transpacific carrier--it intends to avoid stepping on the toes of Japan Air Lines.

ANA President Taizo Nakamura, calling JAL his company’s “elder brother,” indicated that U.S. airlines will be ANA’s principal competitive targets, especially on the Tokyo-Washington route.

“We will be in severe competition with Japan Air Lines but, sharing a bond as a Japanese corporation with JAL, there may be areas in which we will cooperate with JAL,” Nakamura said in a talk at the Foreign Correspondents Club here.

“We should not be at loggerheads. I don’t believe in focusing just on competition. It’s natural to consider JAL as our elder brother, our senior. With that framework of mind, it may be possible to find areas for cooperation with JAL.”

All Nippon Airways will begin service five times a week between Tokyo and Los Angeles on July 16, he said, and will launch the first non-stop direct service between Tokyo and Washington on July 26, flying the route three times a week.

Although ANA was established 24 years ago, it had no regular international flights until it began flying between Tokyo and Guam on March 3. Japan’s insistence on controlling aviation competition and the United States’ countervailing demands that competition be encouraged for years have blocked a conclusion of a new aviation agreement between the two countries.

Pressed to state how he feels about free competition in aviation, Nakamura, a former Transportation Ministry bureaucrat, acknowledged that he believes that “regulations are necessary.”

He termed “difficult to answer” a question about a widespread “dual price” structure for air tickets sold in Japan under which government regulations control fares for first-class and business-class passengers but nearly all other tickets are sold in a free-for-all reduced-fare market.

But he acknowledged that ANA selected Los Angeles and Washington as its first U.S. destinations because of the relatively high percentage of travelers to and from those cities who buy full-fare tickets.

Rejecting fare competition with other transpacific carriers, he said that ANA, as “a new entrant in international aviation, must go in as smoothly as we can. Otherwise, we will be made into a punching bag.”

Nakamura said ANA expects its Tokyo-Washington flights during the first year of operation to average no more than 50% full--a rate at which he said losses are inevitable--but hopes to break into the black in the second year with a load factor of at least 60%.

“We are resolved to accept red ink for the first two years, as a whole,” he said.

ANA, he added, hopes to draw away Tokyo-Washington passengers from existing routes through New York and Chicago, most of which are served by U.S. airlines.

Direct flights to Los Angeles, the main destination for continental U.S.-bound Japanese passengers, are expected to show a profit from the beginning, he indicated.

Interim Agreement

The new routes for ANA were made possible by an interim U.S.-Japan governmental agreement last April under which each government was given the option of selecting three of five kinds of new air service between the two countries.

Japan Air Lines will open a direct route to Atlanta via Seattle twice a week in July and four weekly flights between Honolulu and Nagoya to complete the Japanese options. The U.S. government has not announced its choices.

As part of its choice, the Japanese government last December abolished JAL’s monopoly on overseas air service to enable ANA, which previously flew only charter flights internationally, to compete with the flag carrier in the international arena. All Nippon Airways is a major shareholder of Nippon Cargo Airlines, which began cargo service to the United States last May.

Achieving “a level of service which is not embarrassing on the international level” will be ANA’s initial goal in operating its flights to Los Angeles and Washington, Nakamura said. He did not mention it, but full meals are not served on any of ANA’s flights in Japan.

All Nippon Airways will be bringing the same kind of strength to recruiting passengers for its international flights that United Airlines brought to the transpacific service that it took over from Pan American on Feb. 12.

While United serves 164 cities in the United States, more than any other carrier that flies to Japan, ANA handles 55% of all air passengers inside Japan with 494 daily flights to 30 cities on 71 routes.

Although it ranks only 16th in the world in the distance over which it carries all of its passengers, ANA outstrips Japan Air Lines, even including JAL’s international service, both in numbers of passengers and in aircraft operated. In fiscal 1985, it carried 24.4 million passengers.

To funnel passengers originating in cities other than Tokyo onto its new international routes, ANA plans to begin domestic service from Osaka, Sapporo and Fukuoka to Tokyo’s international airport at Narita. At present, Tokyo’s Haneda Airport, located 50 miles from Narita, is the hub for ANA’s domestic flights.

Nakamura also said he expects ANA to win government permission to inaugurate scheduled service from Tokyo and Nagoya to Peking and Shanghai soon.

Bribery Charges

Six ANA executives, including Chairman Tokuji Wakasa, are appealing their convictions on charges connected with the Lockheed Aircraft bribery scandal.

Former Prime Minister Kakuei Tanaka, who was convicted in October, 1983, of accepting a $1.8-million bribe from Lockheed Aircraft Corp. during his 1972-74 term in office, also has appealed. A series of district court verdicts found that ANA had purchased Lockheed Tristar jets at Tanaka’s urging.

ANA has increased its operating income by about 2 1/2 times since the scandal was exposed in 1976. It now operates 20 hotels, four of them overseas, compared to only two in 1975.

A N A ‘S OPERATIONS IN JAPAN

Domestic network serves 30 cities. All figures are daily estimates.

Flights 500 Seats 120,000 Passengers 73,000 Cargo shipments 810 tons Mail shipments 100