International market access rights are negotiated bilaterally under the system, and routes have been limited mostly to carriers identified with the countries involved. But greater network densities (travel from Tokyo to London might as well be via Seoul, Taipei, Beijing, Hong Kong, Singapore or on any one of a number of convenient routes that are just as direct), and new routes based on connections between relatively small cities, have eaten away at the position of carriers established under these rules. They no longer had the immunity from competition that there once appeared to be. Smart carriers can thrive within the system, finding new markets for growth and cutting costs on budget lines through off-shoring operations.

The JAL case is not only a poignant example of an international business in the middle of a huge upheaval as insurance of the regulatory regimes of the past unravel under the pressure of remarkable changes in technology and the market. It is also a poignant test of the resolve of the new Hatoyama administration in Japan to cut loose from cosseting the dinosaurs of Japanese business and let them face the winds of international competition. JAL is not too big to fail and be re-invented as a competitive carrier, but it will take as much political as commercial courage for that to happen.