JAL to step out of air cargo business

Struggling carrier Japan Airlines Corp, currently involved in a state-backed restructuring exercise, will step out of the air cargo business by the end of October in a bid to cut costs.

In a statement the carrier, Asia's largest, said it will continue carrying cargo in the bellies of its passenger aircraft. It added that its passenger fleet had three times as much total cargo capacity as its freighter services.

In the nine months to 31 December 2009, JAL's cargo unit posted a loss of 10 billion yen ($109 million) with global recession impacting air freight. Earlier this month, the carrier opted out of talks on combining cargo operations with shipping line Nippon Yusen KK's air-freight unit.

''We decided to move to a model where we can make money,'' said vice president Toshiro Tada. ''We were losing money and it wasn't clear when the cargo business would turn around.''

The Tokyo-based airline has ten cargo planes of which five are leased, and the rest, all Boeing Co 747s, will be put up for sale, the airline said.

JAL also said it had finalised an agreement to code-share on 13 British Airways routes in Europe as part of an effort by American Airlines to keep JAL in the Oneworld alliance.