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JAL, ANA 'plan fare hikes'
TOKYO, Japan -- Japan's two big carriers, Japan Airlines System and All Nippon Airways, plan to raise fares on international routes by about 3 percent from April 15, according to a report. The Nihon Keizai business daily said Thursday that JAL and ANA have also decided to raise fares on domestic flights from June, citing higher fuel costs and landing fees The move in Japan comes as airlines in almost every market deal with a downturn in passenger numbers because of the impending conflict in Iraq. Many airlines have already announced cuts in services to the Middle East and on other routes. Singapore Airlines, for example, said Wednesday that it would cut its Dubai flights. Other Asian carriers, including Korean Air and Thai, took similar action earlier this week. However, U.K. entrepreneur Sir Richard Branson, founder of the Virgin Atlantic and Virgin Blue airlines, told CNN on Thursday that he expected fuel prices would drop once a war in Iraq was over. He said this would allow his long-haul Virgin Atlantic airline to expand again. Branson said the aviation market in Australasia was "booming" and the problem for his Australia-based airline Virgin Blue was not a lack of passengers but a lack of planes. The Nihon Keizai business daily said Thursday that the decision by the two Japanese carriers follows an agreement by the International Air Transport Association (IATA) to increase fares due to rising fuel costs. Industry sources said IATA has decided to raise regular fares on international flights by 3 percent, with the price hike expected to take effect on April 15. This will be the first fare hike approved by the IATA, which is composed of major airlines from around the world, since March 2001. The two Japanese airlines will also have to obtain approval from the Ministry of Transport, which is expected to endorse the increase. Shares in JAL are more than 2 percent higher to 246 yen in early trade Thursday. ANA is up 0.87 percent to 233 yen. The broader market is about 1.5 percent higher.
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