Innovation and upgrades have helped propel All Nippon Airways past Japan Airlines and made it the most popular Japanese carrier in terms of passenger traffic.
The rival airlines have announced their figures for domestic and international travellers for fiscal 2010, which ended on March 31, with 43,059,622 passengers opting to fly with ANA, an increase of 1.6 percent on the previous year.
JAL, in comparison, transported 41,923,452 passengers during the year, a decline of 12.6 percent. Of that figure, international passengers were down an alarming 19.9 percent and those flying on domestic routes fell by 10.5 percent.
JAL's financial worries meant that it was obliged in April 2010 to announce that it was suspending operations on 45 domestic and international routes that were not profitable.
ANA has overtaken JAL in terms of passenger numbers for the first time since 2002, when JAL linked up with Japan Air System.
Both companies would have reported better figures if dozens of flights to and from airports in northeast Japan had not been cancelled after the March 11 earthquake and tsunami. Services on those routes, such as to the city of Sendai, are being restored but remain significantly below their previous levels.
Nevertheless, ANA's policy of investing in technology and improved facilities for its customers appears to be paying off.
In October, the company's hub of Haneda International Airport opened a new international terminal equipped to deal with a surge in new travelers wanting to use a facility that is much closer to and more convenient for central Tokyo than the city's other airport, at Narita.
The state-of-the-art facility is able to handle Airbus 380 aircraft and ANA immediately launched new routes linking Haneda with London, Los Angeles, Honolulu, Singapore, Bangkok and Taipei.
To meet the needs of all those additional travelers, ANA has opened a series of new lounges and restaurants, as well as introducing its "Click" self-service check-in booths.
The airport has also won acclaim for the universal design principles that have been incorporated into passenger areas, meaning that facilities take into consideration the needs of people with a wide range of disabilities.
ANA also beat its great domestic rival to the punch when it released an iPad app in March. The ANA Virtual Airport provides access to articles from the airline's in-flight magazine, "Wingspan," videos and other information for anyone using its flights.
The airline announced in mid-May a cooperation agreement with Mongolian airline Eznis Airways, while it is also putting the finishing touches to a joint venture with a Hong Kong investment group to create Japan's first low-cost carrier. That is designed to make it competitive against the growing number of similar airlines appearing across the Asia-Pacific region, from Malaysia's AirAsia X to Jetstar of Australia and Philippines-based Cebu Pacific Air.
JAL, on the other hand, is still struggling to rebuild its finances and reputation after filing for bankruptcy in January 2010. The company also announced on Tuesday that it was having to further reduce its capacity on both international and domestic routes due to the decline in demand.