Tokyo: The new chief of beleaguered Japan Airlines is refusing to impose further swingeing cuts to jobs and unprofitable routes despite heavy pressure from the carrier’s creditors, a report said on 22 April.
The airline’s 78-year-old chief Kazuo Inamori, an entrepreneur and ordained Buddhist monk, is attempting to contain mounting pressure from banks to conduct further aggressive restructuring of the flag carrier.
“Syndicated banks and government tell me we need to do more by drastically reducing more flight routes and jobs,” he said in an interview with the Wall Street Journal published on 22 April.
“I am trying to keep the reduction level as planned,” he said.
JAL filed for bankruptcy protection in January and aimed to shed nearly 16,000 employees by March 2013 from the original workforce of 50,000 and cut unprofitable routes, but has recently been under pressure to speed up the plan.
The airline’s main lenders, including Mizuho Corporate Bank, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corp, are forgiving more than $8 bn of debt in return for more stringent restructuring, the report said.
The carrier, undergoing a court-led bankruptcy programme, is considering asking for an extension to a June deadline to draft its rehabilitation plan having failed to reach a deal with creditors, according to reports on 22 April.
JAL wants two months to refine the plan amid disputes over the size of job cuts and termination of routes, the Yomiuri Shimbun said without citing sources.
The flagship carrier went under with 26 billion dollars of debt in one of Japan’s biggest ever corporate failures, but has continued flying while it goes through painful state-led restructuring.
The government asked charismatic entrepreneur Inamori, founder of high-tech maker Kyocera, to turn around the former state-run company.
While promising to bring the bankrupt carrier to profitability, Inamori has openly lamented at the lack of business sense among JAL managers and employees.
Transport minister Seiji Maehara told a legislative committee on 21 April that the deadline could be extended.
“Depending on the speed of the progress being made, a change (of the deadline) is possible,” he said.
“Even if the plan experiences a moderate delay, I don’t think it would cause JAL’s loss to expand or cause other bankruptcies,” he said.