JAL to cut jobs and services
Rescue plan will see JAL slash 15,000 jobs and cut 49 routes
Bankrupt Japan Airlines’ (JAL) rescue plan, which was submitted to the Tokyo District Court on Tuesday, will see the airline slash jobs and services.
JAL’s reorganisation plan, if approved, will see the airline reduce aircraft numbers by over 100; cut 49 unprofitable routes; reduce expenses; liquidate non-core businesses; reduce staff numbers from 48,800 to 32,600; form new alliances and increase its ability to deal with financial crisis.
JAL will reduce aircraft numbers by retiring less efficient planes and cut staff numbers by the sale of subsidiaries and by offering early retirement.
It is expected that the Tokyo District Court will approve the plan by the end of November.
JAL said it hoped that the plan would help it to return to profit by the end of the current fiscal year.
The plan will also see the state-owned Enterprise Turnaround Initiative Corporation (ETIC) invest Y350 billion (US$4.1bn) and the airline will benefit from a debt waiver of Y521.5 billion from lenders.
In January, JAL filed for court protected bankruptcy and applied to ETIC, which is a joint-stock corporation established by the Japanese government to provide support for the revitalisation of corporations, for restructuring support.
The bankruptcy of JAL, which was one of Japan’s biggest corporate failures to date, was blamed on the financial crisis causing a significant decline in demand for international passenger service for business users and a sudden decline in demand for international cargo service.
In March, the airline announced it would axe its freighter services because of severe market conditions.
The decision followed the collapse of talks with NYK over a merger with its air freight subsidiary, Nippon Cargo Airlines.
In June of 2009, JAL Group received loans in the total amount of €100bn [US$1bn] from Development Bank of Japan and other private financial institutions.
JAL’s reorganisation plan, if approved, will see the airline reduce aircraft numbers by over 100; cut 49 unprofitable routes; reduce expenses; liquidate non-core businesses; reduce staff numbers from 48,800 to 32,600; form new alliances and increase its ability to deal with financial crisis.
JAL will reduce aircraft numbers by retiring less efficient planes and cut staff numbers by the sale of subsidiaries and by offering early retirement.
It is expected that the Tokyo District Court will approve the plan by the end of November.
JAL said it hoped that the plan would help it to return to profit by the end of the current fiscal year.
The plan will also see the state-owned Enterprise Turnaround Initiative Corporation (ETIC) invest Y350 billion (US$4.1bn) and the airline will benefit from a debt waiver of Y521.5 billion from lenders.
In January, JAL filed for court protected bankruptcy and applied to ETIC, which is a joint-stock corporation established by the Japanese government to provide support for the revitalisation of corporations, for restructuring support.
The bankruptcy of JAL, which was one of Japan’s biggest corporate failures to date, was blamed on the financial crisis causing a significant decline in demand for international passenger service for business users and a sudden decline in demand for international cargo service.
In March, the airline announced it would axe its freighter services because of severe market conditions.
The decision followed the collapse of talks with NYK over a merger with its air freight subsidiary, Nippon Cargo Airlines.
In June of 2009, JAL Group received loans in the total amount of €100bn [US$1bn] from Development Bank of Japan and other private financial institutions.
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