Flying High
20 years of progressFlying High
20 years of progressAn open nose cargo door

NCA's first aircraft takes off from Anchorage on a winter day (Photo by Katsu Aoki)

Transporting an elephant sent from Thailand tocelebrate the birth of Princess Aiko

In Indianapolis
Returning to Narita

Unloading a race car

Unloading a Boeing 777 engine

Beginning cargo unloading

Cargo waits to be loaded

Towed by a tractor

Transporting an elephant sent from Thailand tocelebrate the birth of Princess Aiko
Transporting an elephant sent from Thailand tocelebrate the birth of Princess Aiko

In Indianapolis
Unloading a race car

In Indianapolis
Unloading a race car

Transporting race cars for the Indy Japan 300 (Indianapolis)

Loading a helicopter

Transporting race cars for the Indy Japan 300 (Indianapolis)Aircraft inspection

Engine Maintenance

Overhead work

Jacking up an aircraft

Maintenance team

Changing tires

Between-flight maintenanceBriefing

Daybreak (Photo by Katsu Aoki)

Taxiing on a rainy day (Photo by Katsu Aoki)

Amsterdam BranchFrankfurt BranchMilan Branch

London Branch

New York Branch

San Francisco Branch

Los Angeles Branch

Chicago Branch

Anchorage Flight Operation OfficeBoston OfficeMessage

Upon publication ofour 20-year history

In May 2005, Nippon Cargo Airlines celebrated the 20th anniversary ofits commencement of service. As part of that celebration, we are
publishing Flight: NCA’s 20-Year Progress, the history of our first 20years of operation. Previously, we published A Brief History of NCA’sFirst 10 Years of Operation. Now, ten years later, we have compiled
another brief history that both looks back upon the path opened by those
who preceded us and looks ahead to the new era that lies before us.
Nippon Cargo Airlines began with a frontier spirit as it pioneered
the new industry of international cargo aviation in Japan. Since its
founding, NCA has met challenges head-on, holding to the ideal of“nothing ventured, nothing gained.” Having begun with 2 dedicated
B747 freighters making 6 flights per week, NCA has grown to the point
where it now operates 12 B747 freighters on 56 flights per week to 16
cities around the world. The fact that we have been able to do so
without a major accident is due to those who preceded me in giving
their all to NCA, to all those who have supported us in so many ways,
and to the hard work of all of NCA’s employees and executives. I am
most grateful to all of them.
The many experiences we have accumulated over the past 20 years
have formed NCA’s foundation. It is also true, however, that somewhere
along the way NCA lost some of the aggressive spirit of its early days
and has become conservative and slow to make decisions.
Today, the importance of international air cargo is becoming more
and more striking, and business has become fully aware of its potential.

ii

On the other hand, the outside environment is changing at a dizzying
pace, with aggressive capital investment by foreign firms and deregulation of air cargo sharpening international competition, and rising fuelprices driving up costs. Amidst these circumstances, in order to overcome
international competition and continue to grow, NCA must develop a
corporate culture that responds flexibly to change and that is not easily
influenced by its environment.
This year, NCA has begun introducing new B747-400Fs. As exemplified by these new aircraft, we are at a major turning point. Aimless
repetition of what has been done before will not result in furthergrowth. With safe operation, the basis of our company, as the highest
priority, let’s return to the spirit of NCA’s early days. Let’s have a strong
spirit willing to take risks and meet challenges. Let’s openly express
our opinions. Our mission is to contribute to society through the further
growth of our firm.
May 2005
Takuro Uchiyama
President & CEOiii

Contents
Color Photos, Part 1
Message

Chapter 1. Before our founding ...................................................3
1. Towards the open sky:From the sea to the sky, the curtain rises on a new eraof cargo transport....................................................................................3Interest in an international air cargo company ..............................................3
Three shipping lines and Japan Airlines conceive a new company .............3
New movement by two shipping lines and All Nippon Airways...................4

2. The 19-year journey from concept to reality:
Restructuring of the group ...................................................................5
Making establishment of an international cargo airline a reality..................5
Unification of the two groups..........................................................................5

3. On the eve of breaking the international-route monopoly:
Towards obtaining a license ................................................................7
The establishment of Nippon Cargo Airlines Co. Ltd.,and its license application..........................................................................7
The Ministry of Transport holds hearings ......................................................8
At long last, consultation in the Transport Council .......................................84. Debating the claim of oversupply:
From the public hearing to the issuance of a license..................10
Towards the holding of a public hearing......................................................105. The long-awaited first flight stretches its wings
Japan-US aviation talks stall.............................................................12
Capital is increased to ¥3.2 billion as systems are prepared
to begin operations ...................................................................................12iv

A new obstacle to beginning operations: Japan-US aviation negotiations..14
Towards a system of multiple international carriers....................................16
The first flight was on May 8, with 50 tons of cargo ....................................17
ColumnFuselage design............................................................................................19

Chapter 2. NCA’s first 10 years ..................................................22
1. NCA spreads its wings (1985–1987):
Riding out turbulence.........................................................................22
A difficult start..............................................................................................22
Strategies to differentiate NCA from competitors........................................23
Pursuit of safety and punctuality .................................................................23
Seeking to establish a business base ...........................................................24
Entry into Southeast Asia and more USA routes.........................................25
An annual profit in NCA’s third year ...........................................................26

2. Expanding networks (1988–1990): Towards growth ......................28
Opening an Amsterdam route......................................................................28
The Bangkok route opens, establishing three bases in Asia.......................29
Entry into four major US cities.....................................................................29
Constructing an information system.............................................................30
Employment of foreign crewmembers .........................................................30
Promotion of organizational reform..............................................................31

3. Aiming to be a major player in the 21st century(1991–1994): The beginning of a new challenge.........................32
NCA’s route network continues its expansion..............................................32
Establishing a Milan route ...........................................................................33
New storage facilities ...................................................................................34
Development of a new cargo data system and a new accounting system....35
Efforts to improve transport quality .............................................................35
More efficient loading management.............................................................36
The greatest crisis since the company began ..............................................36v

Toyoichiro Nakada becomes President of NCA ..........................................37
Facing a new era...........................................................................................38
Beginning flights to and from Kansai International Airport........................39
Jiro Nemoto becomes Chairman .................................................................39
ColumnBehind the scenes of NCA’s creation ...........................................................41

Chapter 3. On the path to becoming a member ofthe incumbent carrier group .............................45
1. Aviation negotiations ...............................................................................45
Japan-US relations: The path to becoming an incumbent carrier...............45
Japan-China relations: Growing along with the Japan-China market.........46
Other areas in Asia: Entry into Manila........................................................46
Europe: To London and Frankfurt ...............................................................47

2. Changes in the route network ................................................................48
Introduction of NCA’s seventh and eighth aircraft andexpansion of the route network ................................................................48
Introduction of NCA’s ninth and tenth aircraft andfurther expansion of the route network ....................................................49
Unprecedented sluggishness in cargo demand andthe suspension of the Portland route........................................................49
Eliminating the accumulated loss and taking on new challenges...............51

3. Response to changing markets .............................................................53Results from the past 10 years.....................................................................53(1) Products from Japan............................................................................53(2) Seasonal products ...............................................................................53(3) Transport of live animals.....................................................................54(4) Transport of event-related cargo .........................................................54
Cooperation with ANA.................................................................................55(1) Sales and transport..............................................................................55(2) Operations and maintenance..............................................................55vi

(3) ANA’s B767F freighter........................................................................56
Code sharing and alliances ..........................................................................56

4. Development of facilities ........................................................................58
Development of North American warehouses .............................................58
Development of offices.................................................................................59(1) Head Office .........................................................................................59(2) Offices in Asia.....................................................................................60(3) Offices in Europe ................................................................................61

5. Promotion of increased use of information technology....................63
Completion of an office automation system .................................................63
Achievement of on-line links.......................................................................63
Responding to customer demand for advanced data services.....................64

6. Improving transport quality ...................................................................65
eWG development and organizational review to strengthenmarketing ability ......................................................................................65
Development of new “Prio” products ..........................................................65
Global contracts with forwarders .................................................................66
Improving transport quality..........................................................................66
CARGO 2000...............................................................................................68

Chapter 4. The era of crisis management............................70
1. Simultaneous terror attacks in the USA .............................................70
9/11: an unprecedented catastrophe............................................................70
Three long days until operations returned to normal...................................72
Introduction of security charges...................................................................74

2. Response to crisis management............................................................76
The year 2000 problem................................................................................76Strengthening crisis management systems ..................................................77
SARS ............................................................................................................77
Major blackout in the northeastern USA.....................................................78vii

Oil prices and fuel surcharges .....................................................................79
An accident causing aircraft damage...........................................................80Color Photos, Part 2

Chapter 5. Becoming a more competitive company.....83
1. The way NCA should go .........................................................................83
Medium-term management concepts (FY 1997–2000) ..............................83
Takashi Ijichi becomes President ................................................................85
The MAX 07 medium-term management plan (FY 2003–2007)...............86
Takuro Uchiyama becomes President .........................................................89
Cost Optimization Project (FY 2004)...........................................................90

2. Constant effort and creation of structure for safe operations .........91
Operations quality ........................................................................................91(1) Flight crew structure...........................................................................91(2) Ground support system.......................................................................92(3) New technologies ................................................................................93
Aircraft maintenance....................................................................................93(1) Introduction of customized freighters.................................................93(2) Changes in the maintenance system in the past 10 years..................93(3) Changes in the organization and functions of the maintenancedivision ................................................................................................94(4) Aircraft maintenance outsourcing ......................................................95

3. With new aircraft ......................................................................................96
4. The coming 10 years ...............................................................................98

Appendix
NCA’s Chairmen and Presidents ........................................................102
Number of employees............................................................................103viii

Capitalization ..........................................................................................104
Organization chart..................................................................................105
Income and expenditure .......................................................................110
Transport results .....................................................................................111
Flight operations results .......................................................................112
Development of routes ..........................................................................113
Route network .........................................................................................114
Chronology ...............................................................................................116
Editors’ Comments .......................................................................................140

Explanatory notes
1. In principle, quotations are taken word-for-word from the original.
2. For the names of people, honorifics are generally omitted in accordance with the customary practice in histories. In some cases, however,job or professional titles are used in place of honorifics.
3. For the names of corporations, shortened forms omitting “Co.,Ltd.,” “Co.,” and so on are generally used, except in descriptionsof a company’s founding or when otherwise deemed necessary. Forairlines, IATA two-letter codes and ICAO three-letter codes may
sometimes be used.
4. Non-Japanese words and place names are expressed as commonly
practiced or used in English. In some cases, IATA three-lettercodes may sometimes be used for the names of airportsix

20 years of progress