Japan Airlines to cut over 1,000 jobs, seek more loans
Thursday 10th September, 06:34 AM JST
TOKYO —
Japan Airlines Corp, restructuring under state supervision, is likely to tap financial institutions for around 170 billion yen in additional loans while considering cutting more than 1,000 jobs through an early retirement program after October, sources familiar with the matter said Wednesday. The nation’s largest air carrier will also consider selling shares in a subsidiary that runs some of JAL’s international flights, they said. JAL is also considering eliminating more routes and reducing flights.
The airline will present an outline of its new management improvement plan to a panel to be convened next Tuesday by the Ministry of Land, Infrastructure, Transport and Tourism. While it plans to finalize the plan by the end of this month, strong opposition from within is also anticipated.
As part of its restructuring plan, the company is already set on cutting about 5,000 jobs, or around 10% of its group workforce, over three years to March 2012. It hopes to effectively carry through and accelerate the streamlining measure by soliciting early retirement, the sources said.
JALways Co, a unit that chiefly flies leisure and low-yielding routes, plans to sell some of its shares to trading houses, travel agencies or investment funds. JAL will maintain a majority stake in the subsidiary.
Last month, loss-making JAL said it will suspend or cut 10 international routes and reduce flights on six routes, but it will step up its efforts to trim other unprofitable flights, the sources said.
JAL plans to suspend flights connecting Chinese cities and Tokyo and Osaka. It may also suspend or transfer to JALways flights between Tokyo and Mexico City and Milan, Italy.
On domestic flights, it will reduce some to and from Kansai International Airport, serving Osaka.
In June, JAL signed a deal with two state-backed lenders and three major Japanese commercial banks to borrow a total of 100 billion yen, and plans to receive another 100 billion yen in additional loans before the end of the year.
JAL’s group net loss for the current business year through next March is expected to widen from an initially anticipated 63 billion yen as travel demand continues to be pounded by the economic downturn and the spread of the new influenza strain.
It currently requires around 170 billion yen in additional loans, but sources said that amount could further increase.
Thursday 10th September, 06:34 AM JST
TOKYO —
Japan Airlines Corp, restructuring under state supervision, is likely to tap financial institutions for around 170 billion yen in additional loans while considering cutting more than 1,000 jobs through an early retirement program after October, sources familiar with the matter said Wednesday. The nation’s largest air carrier will also consider selling shares in a subsidiary that runs some of JAL’s international flights, they said. JAL is also considering eliminating more routes and reducing flights.
The airline will present an outline of its new management improvement plan to a panel to be convened next Tuesday by the Ministry of Land, Infrastructure, Transport and Tourism. While it plans to finalize the plan by the end of this month, strong opposition from within is also anticipated.
As part of its restructuring plan, the company is already set on cutting about 5,000 jobs, or around 10% of its group workforce, over three years to March 2012. It hopes to effectively carry through and accelerate the streamlining measure by soliciting early retirement, the sources said.
JALways Co, a unit that chiefly flies leisure and low-yielding routes, plans to sell some of its shares to trading houses, travel agencies or investment funds. JAL will maintain a majority stake in the subsidiary.
Last month, loss-making JAL said it will suspend or cut 10 international routes and reduce flights on six routes, but it will step up its efforts to trim other unprofitable flights, the sources said.
JAL plans to suspend flights connecting Chinese cities and Tokyo and Osaka. It may also suspend or transfer to JALways flights between Tokyo and Mexico City and Milan, Italy.
On domestic flights, it will reduce some to and from Kansai International Airport, serving Osaka.
In June, JAL signed a deal with two state-backed lenders and three major Japanese commercial banks to borrow a total of 100 billion yen, and plans to receive another 100 billion yen in additional loans before the end of the year.
JAL’s group net loss for the current business year through next March is expected to widen from an initially anticipated 63 billion yen as travel demand continues to be pounded by the economic downturn and the spread of the new influenza strain.
It currently requires around 170 billion yen in additional loans, but sources said that amount could further increase.
