Triple Seven JA8978 showing the Rainbow Seven colour scheme during take-off from Fukuoka on 10 November 2002.

On October 2, 2002 Japan Airlines and Japan Air System officially founded the New JAL Group, thus starting the first phase of the two companies' total integration. From that day on, JAL and JAS resorted under the new holding company Japan Airlines System Corporation. In practice, this meant the end of JAS' own identity. With that, not only a large domestic carrier is disappearing but also the most colourful of the three major companies that have dominated the scene on dozens of Japanese airports for many years.

According to plan, the process of integration should be completed around the time of writing of this article, having the target date set at April 2004. The group now has several operating companies for business areas like international, national and cargo transport. Huge cost savings are expected next year as a result of the elimination of redundant parts of the company, like double sales-points. Simultaneously, the domestic network has to be developed (even) further, resulting in more revenue. These measures are dictated by Japan's economic recession that started in the previous decade and keeps putting a strain on ticket sales. On top of that, competition from abroad has risen high lately, mainly by other Asian companies - operating at lower cost - but also in a low-fare battle with European and American carriers.

Rumours about a merger had been around for longer but nothing materialised as neither company was willing to give in to the other. 2001 however was concluded with a loss for JAL as well as ANA, and JAS experienced a major drop in profits. Naturally, the effects of September 11, especially on international air travel, made things worse, together with the ever-continued deregulations at an international, but certainly also national, level - the latter through a steady loosening of the governments' grip on domestic route distribution and fare levels. Suddenly JAL and JAS found themselves in a competitive situation, in stead of supplementing each other as before. At that point in time, with the airline industry globally dominated by major reorganisations, two of Japan's "big three" were ready for a merger.

Japan Air System existed as such since April 1, 1988 when this became the new identity of Toa Domestic Airlines. This company in turn was the result of a merger and the merging process turns out to be a key factor in the history of JAS. To start at the beginning of this history we go back to the nineteen-fifties when, just like in the rest of the world, the basis for modern aviation was laid in post-war Japan.