Japan Airlines to cut labour costs

5th Feb 2007

Japan Airlines Corp plans to slash personnel costs by around 50 bln yen by fiscal 2009 under the carrier’s new restructuring plan, the Nihon Keizai Shimbun reported, without citing sources. This and other proposed restructuring measures are in JAL’s medium-term business plan due out Tuesday, which focuses on improving productivity, overhauling flight routes, revamping group operations and strengthening offerings, it said.

The troubled carrier on Friday presented the plan—which covers fiscal 2007 through fiscal 2010—to four banks, such as main lenders Development Bank of Japan and Mizuho Corporate Bank, and requested a total 60 bln yen in lending for this fiscal year, the report said.

The airline had initially planned to reduce its work force expenses by around 30 bln yen in fiscal 2009. But at lenders’ behest, JAL will expand those cuts to 50 bln yen, it said.

It will shrink its flight-related work force of 30,000 or so by around 3,000, with early retirements accounting for 700-800 of these and attrition the rest, it said.

Ten unprofitable domestic routes will be suspended, and JAL will also sell its shares in trading company subsidiary Jalux Inc, the report added.



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