In an effort to cope with recent high oil price and global warming, developments of air lubricated ships have been pursued to reduce greenhouse gas emissions and to save fuel costs by reducing the frictional resistance. In this study, reduction in the frictional resistance by air lubrication with air layers generated on the lower surface of a flat plate was investigated experimentally in the large water tunnel of SSMB. The generated air layers were observed, and changes in the local frictional drag were measured at various flow rates of injected air. The results indicated that air lubrication with air layers might be useful in reducing the frictional resistance at specific conditions of air injection. Accordingly, resistance and self-propulsion tests for a 66K DWT bulk carrier were carried out in the towing tank of SSMB to estimate the expected net power savings.