JAL to cut more flights to speed up restructuring

JAL to cut more flights to speed up restructuring
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First Published: Wed, Apr 28 2010. 06 48 PM IST
Updated: Wed, Apr 28 2010. 06 48 PM IST
Tokyo: Japan Airlines will cut 45 international and domestic routes and shift faster to smaller jets, the carrier said Wednesday, as it is pressed to drastically cut costs while restructuring.
The indefinite suspensions of 15 international and 30 domestic routes bring Japan Airlines Corp.’s total route cuts to 78, effectively slashing 40% of its international operation and 30% of domestic operation. The airline, known as JAL, had suspended 33 routes during the fiscal year ended March.
A statement said JAL was trying to “achieve a drastic reduction of fixed costs, which was initially planned for three years, in one year.”
JAL filed for bankruptcy protection in January with $25.6 billion in debt and is undergoing a government-led restructuring under new leadership. It has been delisted from the Tokyo Stock Exchange.
Among international routes to be discontinued after September are those between Tokyo and Amsterdam, Rome, Milan and San Francisco, as well as Osaka to Guam, Hong Kong and Beijing. Dozens of unprofitable routes between Japanese cities are also scrapped.
“We have to change (JAL) into a muscular company,” new JAL chairman Kazuo Inamori told a televised news conference.
Wednesday’s announcement did not include any job cuts.
JAL previously announced it would cut about one-third of its workforce of 47,000 or about 15,000, over a three-year period. But on Wednesday, company spokesman Taro Nanba only referred to about 3,600 employees who have applied for early voluntary retirement.
Japanese media reports have speculated staff cuts of more than 16,000 by March 2011 to speed up the restructuring process, as the company is still deeply in the red.
In February, JAL said it lost a record $2 billion in the nine months through December, but that its results were improving.
JAL is finalizing details of its restructuring plan, but is behind schedule and likely miss the end of June deadline for submission to the court, Nanba said, without elaborating.
JAL is looking for a boost from closer ties with alliance partner American Airlines. The two carriers are seeking government approval to work more closely in areas such as revenue sharing and carrying each other’s passengers.
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First Published: Wed, Apr 28 2010. 06 48 PM IST