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Sagawa to set up new cargo airline with JAL's help

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), a newspaper said yesterday.

The planned new venture, the first fully-fledged cargo airline in Japan in 15 years, will start operation in March next year, the Nihon Keizai Shimbun said, quoting company sources.

The firm aims to offer cargo transport services at prices 20-50 percent 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 billion (US$48 million), will be owned 50 percent 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, Nihon Keizai said.

The firm will use Airbus A300-600 and Boeing Co. B767 planes, which have a cargo capacity four times that of a large truck. The firm may buy used aircraft instead of leasing new ones.
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