The Journal The Authority on Global Business in Japan


January 2014

Airline Alliance Creates World’s Largest Carrier

PressPlaneAmerican Airlines and US Airways have completed a merger to create the world’s biggest airline (Wall Street Journal, December 9).

The agreement follows the parent company of American Airlines, AMR Corporation, emerging from its bankruptcy filing in 2011.

The merger had previously been blocked by the US Department of Justice (DOJ) over concerns about competition in the sector.

“Our people, our customers, and the communities we serve around the world have been anticipating the arrival of the new American,” said new boss Doug Parker, who was previously the head of US Airways.

“We are taking the best of both US Airways and American Airlines to create a formidable competitor, better positioned to deliver for all of our stakeholders. We look forward to integrating our companies quickly and efficiently so the significant benefits of the merger can be realized.”

The two companies expect the merger to save them more than $1 billion in synergies.

The new airline, known as American Airlines, will provide nearly 6,700 daily flights to more than 330 destinations over 50 countries and will have over 100,000 employees.

As part of the settlement with the DOJ, both US Airways and American Airlines agreed to give up several hundred slots at airports across the United States.

The slots were intended for low-cost carriers such as JetBlue and Southwest Airlines to keep prices low for consumers who might be hurt by the increasing consolidation in the US airline industry.

“With the merger of American Airlines and US Airways, the long cycle of US industry reconstruction that began in 1979 with deregulation is now complete,” said Ray Neidl, an aviation consultant at Nexa Capital.

“The public, as well as investors, will benefit from a financially strong industry that can now invest to keep its product updated and in international markets competitive with foreign carriers,” said Neidl.

E-commerce Company Launches Online Video Service launched its Instant Video online platform on November 26, offering movies and TV series for streaming, download rental, and purchase (The Hollywood Reporter, November 28).

Rental fees for 24 hours start from around $1 (¥100), with titles from Hollywood studios, local major studios such as Toho and Shochiku, public broadcaster NHK, and commercial networks, including Fuji TV, TBS, and NTV.

Of the 26,000 titles offered, about 15,000 are available in HD. Titles can be streamed to two devices, but downloaded to only one device.

Instant Video will see Amazon, which is already well established as an online mall in Japan, going up against local operators such as GyaO Corp, Tsutaya TV, and NotTV, as well as Hulu and Apple’s Japanese platforms. JCOM, Japan’s biggest cable network, also offers a video-on-demand service that allows content to be downloaded to multiple devices. has been selling e-books since the end of last year, offers more than 25 million songs on its music service, and started to sell over-the-counter medicines in September, following partial deregulation of the pharmaceutical market.

Hotel to Open in Nation’s Tallest Skyscraper

PressHotelMarriott Hotels is to open Japan’s highest hotel suite in the country’s soon-to-be tallest skyscraper (The Asahi Shimbun, December 11).

The Osaka Marriott Miyako Hotel will feature 360 guest rooms from the 38th floor to the 55th floor in the new 300-meter Abeno Harukas skyscraper complex, which is set to open on March 7 in the city’s Abeno Ward.

“There are no world-class hotels in the Abeno-Tennoji district,” said Masahiko Torii, the hotel’s general manager. “We hope to create a more cosmopolitan atmosphere in the area.”

The most luxurious suite—covering 162m2—will be located on the 55th floor, some 258 meters above ground, and will cost ¥350,000 ($3,410) per night.

Moon to Be Solar Power Plant?

PressMoonShimizu Corporation plans to effectively turn the moon into a giant solar power plant (Business Insider, November 28).

The construction, architecture, and engineering firm is proposing a Lunar Ring concept: building around the lunar equator a massive belt of solar panels, 6,800 miles long by 12 miles wide. Robots would build the ring, while humans would only be involved in supervisory roles.

The plant could continuously send energy to receiving stations around the globe using laser and microwave beams.

This idea would eliminate two major obstacles posed by the generation of terrestrial solar power, because the moon has no atmosphere or darkness to affect electricity production.

Shimizu believes the plant could continuously send 13,000 terawatts of power back to Earth. By comparison, it took the United States all of 2011 to generate 4,100 terawatts of power.

The company believes that “virtually inexhaustible, non-polluting solar energy is the ultimate source of green energy that brings prosperity to nature as well as our lives.”

Most Expensive Asian City for Expats

Tokyo remains the most expensive city in Asia for expatriates, while Singapore overtook Hong Kong to become the costliest place in the region outside Japan, according to a survey by human resources consultancy firm Mercer LLC (December 6).

Further, the capital was again found to be the second most expensive city in the world for expatriates after Luanda in Angola.

Osaka was the next most expensive Asian city, ranked sixth in the world. Meanwhile, Singapore was the world’s eighth most expensive city, with Hong Kong in ninth place.

“Most Asian cities have moved up in the ranking as availability of expatriate accommodations is limited and demand is high,” said Mercer’s Nathalie Constantin-Metral.

However, the increase in cost of living was most strongly felt in Australia, due to a rise in the Australian dollar against the US dollar.

Sydney rose 10 places to the 14th spot, while Melbourne jumped to 21st from last year’s 33rd position. London fell to 18th from 17th, with New York dropping to 32nd place from 27th.

Visitors to Japan in 2013 on Target

According to the Japan National Tourism Organization, Japan is likely to have achieved its goal of drawing to the country 10 million foreign travelers in 2013 (Bangkok Post, December 11). The number of foreign visitors to Japan between January and November totaled about 9.5 million.

Foreign travelers in the 11-month period reached 9,499,300—up 23.9 percent from the previous year. In November alone, the number of foreign travelers shot up 29.5 percent to 839,800.

The agency attributed the rise to the yen’s depreciation against other major currencies and the easing of visa requirements for travelers from some Southeast Asian nations.

The number of visitors from China, Taiwan, Thailand, Hong Kong, Indonesia, Vietnam, and India set all-time highs for the reporting month.