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The air transportation, which had been in good condition of management
generally, turned into a considerable deficit in fiscal 1974. In the aspect
of income, the international line noted a 11.4 percent decrease in number of
passengers carried against the previous year because of scarce growth of the
personal consumption expenditures due to the recession, little development in
the productive activities and such a special factor as the effects of relationship
between Japan and Taiwan and Japan and Korea, while the domestic line noted
an increase but only at 7.4 percent. However, with revision of the flight rates
carried out during the period, the operating revenue noted a 19.2 percent increase
over the previous year.
Whereas, in the aspect of cost, the fuel takes a high proportion in the
cost construction of the air transportation so that the considerable rise of
the price of jet fuel had a remarkable effect, thus the operating expense in
fiscal 1974 increasing by such a high rate as 30.3 percent against the previous
year.
As the result, the ordinary balance rate of fiscal 1974 fell short of 100
percent to 94.3 percent. Under such situation, the air line companies are trying
to compress the labor cost by, for example, holding the new employment. In fiscal
1975, the demand is in a trend of recovery.
In the area of air transportation, the service of transport to remote islands
and places is also insured as typically illustrated by the government subsidy
to the Japan Kinikyori (Short Distance) Air Lines Co. But, the transport service
to remote islands and places is inherently of little efficiency of transport.
Thus, the company has a large amount of deficit listed on account of the excessive
rise of cost stated above. From such situation, it is urgently required to take
drastic measures including further rationalization of the management.
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