Japan’s new government to review JAL turnaround plan

Japan’s new government to review JAL turnaround plan

Tokyo: Japan’s new government said on Thursday that it would overhaul the restructuring process for Japan Airlines (JAL), which is seeking state financial aid.

Asia’s largest carrier unveiled earlier this week the outline of an emergency revival plan under which it would cut 6,800 jobs, slash flights and seek a tie-up with a foreign carrier.

But new transport minister Seiji Maehara said he would scrap a panel appointed by the previous Liberal Democratic Party (LDP) government to review the planned revamp.

“Since it is a framework formed by the LDP government, we want to go back to a clean slate and select new members," he said in his first press conference early on Thursday.

A JAL spokesman said the carrier had “no idea" about how the decision would affect its restructuring process because it had only just heard the news.

JAL, which lost more than one billion dollars in the April-June quarter, has said it aims to seal a tie-up with an overseas carrier by mid-October.

Delta Air Lines and American Airlines’ parent company, as well as Korean Air, are reportedly considering taking a stake. European carrier Air France-KLM is also in talks with JAL as a possible partner, a source has told AFP.

The incoming Democrats are generally seen as less business-friendly than the outgoing conservatives and have pledged to put the interests of ordinary people before those of corporate Japan.

But some analysts believe that the new government will be anxious to avoid precipitating mass layoffs or even a collapse of the carrier given its close links to labour unions.