A Lean, Mean Operation

Graham Newton explores the latest developments at JAL’s ground handling services as they adapt to the airlines’ ever-evolving requirements.

The Haneda expansion, meanwhile, is described by the JAL director as a “once in a lifetime” business opportunity. Total aircraft movement capacity will increase by 40 percent — from the current 295,650 flights a year to 407,000 in 2010. Thirty thousand of these services will be international scheduled flights on a short- to medium-haul basis — up to 2,000kms (1,243 miles). This means some giant leaps in capacity between Japan and Asian countries, notably China and Korea.

“We have to take maximum advantage of this opportunity,” says Hatano. “In terms of ground handling, we will review the size of our operations at these airports, including staffing levels, in anticipation of an increase in the number of slots allocated to JAL and an increase in the number of flights operated by foreign carriers.”

Adding to this dizzying level of growth is Japan’s determination to advance its liberalization policy, a move mainly driven by an aspiration to enhance economic ties with its neighbors. The nation’s Asian Gateway Plan will further ease access for international carriers to the country’s domestic and regional airports by adopting a more flexible approach to slot allocation. At the moment, at airports such as Kansai International and Central Japan International (Centrair), foreign airlines can’t use slots left open by their Japanese counterparts. The Asian Gateway Plan will do away with this ruling, allowing the airports to develop their international hub status.

Meanwhile, the first Airbus A380 giant to start scheduled services to Japan (Narita) is expected by the end of this year. To prepare for the aircraft’s arrival and its Code F requirements, JGS has participated in forums conducted by Airbus and plans to purchase any necessary equipment, such as towing tractors and high-lift loaders.

Reducing cost
Growth may be in the cards for JAL’s ground handling company, but Hatano is quick to note this won’t happen through a ‘no expense spared’ policy. “The main challenge facing the company is improvement of efficiency and enhancement of quality while reducing costs,” he says. “This is a common challenge facing ground handling companies worldwide. We are looking at ways to create a leaner operation that utilizes labor more effectively and reduces cost through greater efficiency, while at the same time maintaining service quality and safety.”

The relatively recent formation of JGS itself underlines this strategy. JAL’s ground handling company, Airport Ground Service (AGS), established in March 1957, and JAS’s ground handling company Toa Air Service (TAS), formed in February 1976, combined to form JGS.

The move immediately enabled the Group to streamline its ground handling activities, with a review of sub-contractor agreements and the termination of contracts rendered obsolete by the new company.

This “economies of scale” approach can be seen in the JAL-JAS integration, which also brought huge cost benefits. “We were able to combine sales and ticket offices and airport facilities including check-in counters, administration offices, flight operations departments and ground service facilities,” Hatano informs. “Taking into account staff reductions, economies through fleet reduction and other effects, the net integration was estimated at about 50 billion yen ($413,003,718 USD) for 2005.”

Hatano stresses that cost reduction doesn’t mean a relaxation either of quality or safety — indeed he describes the latter as the JAL Group’s “top priority”. The airline has successfully completed IATA’s Operational Safety Audit (IOSA) and Hatano says JAL would “welcome a program based on the same concept as IOSA to help us to further improve safety in the sphere of ground operations” — a reference to the forthcoming IATA Safety Audit for Ground Operations (ISAGO).

In fact, it seems any new ideas are welcomed at JAL. Borrowing best practices from other industries and constant innovation has allowed it to answer a range of questions posed by the airline’s growing requirements. The end result, as the Japanese would say, is kaizen.

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