JAL’s woes mount on internal strife

Infighting among Japan Airlines (JAL) senior executives is leading to challenging times for the carrier. Earnings have been battered by soaring fuel prices and safety problems are leading some passengers to switch to other airlines such as All Nippon Airways.Planned expansions at Japan’s two major airports—Haneda and Narita—in 2009 to 2010 may also enable the company’s international rivals to take some of its market share.

Analysts are keen to see how the company plans to use its fleets and networks to reduce costs in the coming months. Passenger numbers on JAL’s domestic routes fell steadily in the six months to December, while ANA picked up more fliers for ten months running.

In February four group board members demanded that CEO Toshiyuki Shinmachi, who took over the post less than a year ago, step down along with two other top executives to take responsibility for the company’s poor performance. More than 200 management-level staff have also signed a petition demanding a change in top management, a company source told Reuters news agency.

High fuel prices and safety incidents, including a tyre falling off and an engine catching fire, have led JAL to cut its outlook to a net loss of $405 million for the business year ending in March.

For a long time JAL has been protected by the government since the airline industry is still highly regulated, even though JAL was privatised in 1987.
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