Japan’s Sagawa Express to set up cargo airline in tie-up with JAL

Sagawa Express Co, one of Japan’s big four transport firms, will set up a new cargo airline in April in a tie-up with Japan Airlines Corp (JAL), the Nihon Keizai Shimbun reported, quoting company sources.

The planned new venture, the first fully-fledged cargo airline in Japan in 15 years, will start operations in March next year, it said.

The firm aims to offer cargo transport services at prices 20-50 pct lower than those of its rivals — Yamato Transport Co and Nippon Express Co — using its own planes, the business daily said.

The firm, to be capitalized at 5 bln yen, will be owned 50 pct by Sagawa Express, which is asking major trading houses, like Mitsubishi Corp and Mitsui and Co, as well as JAL, to hold the remaining stakes in the venture, it said.

JAL plans to operate the planes as well as conduct maintenance and repairs for the new firm, it said.

The move is certain to intensify competition among domestic parcel delivery firms ahead of the privatization of Japan Post, the public postal entity, in 2007, the newspaper noted.

Sagawa is likely to apply for an air cargo transport business license with the Transport Ministry by the end of the year.

The company will initially use one plane to make an overnight round-trip flight on two routes — between Tokyo and the northern Japanese island of Hokkaido and between the capital and Fukuoka in western Japan.

In the future, the firm will use Airbus A300-600 and Boeing B767 planes, which both have a cargo capacity four times that of a large truck, the report said, adding that the firm may buy used aircraft instead of leasing new ones.