JAPAN Airlines may cut flights between Australia and Japan as part of a restructuring expected to result in it entering US-style bankruptcy protection next week.
But industry insiders doubt that JAL will exit completely from the route into Australia because the country has long been an attractive destination and is a strong freight market.
JAL flies daily services between Sydney and Tokyo and Brisbane and Tokyo. Its shares slumped ¥30, or 81 per cent, to ¥7 yesterday as speculation mounted that the Japanese Government would back a court-led restructuring. The airline has lost about $US2.5 billion ($A2.7 billion) of market value since January 5.
Analysts speculated yesterday that any reduction in services to Australia by JAL could benefit Qantas and its offshoot, Jetstar.
But Macquarie Equities analysts said that if Qantas did not fill the void - in the event that JAL did reduce or end services - it could open a window for Virgin Blue's long-haul offshoot, V Australia, to begin operations to Japan.
''Given that Australia is only a small part of JAL's international network, we think it may not be considered core if [JAL] were to retain code-share arrangements into Australia,'' the analysts said.
Qantas, which has a code-sharing deal with Japan Airlines, earns an estimated $500 million a year in revenue from the Japan-to-Australia route.
