In the first detailed restructuring plans to emerge since filing for bankruptcy, Japan Airlines (JAL) has announced plans to cut employee pay by five per cent and eliminate bonuses for the fiscal year 2010.
JAL filed for bankruptcy in January this year, with the company subsequently placed under the oversight the Enterprise Turnaround Initiative Corporation of Japan, backed by the national government.
Proposals have been presented to the unions representing staff at the ailing airline, with all employees handling domestic and overseas flights expected to be subject to the revised pay structure.
JAL went bankrupt with over $26 billion of debt earlier this year, with the new Democratic administration promising an investigation into a potential cover-up by the former government.
Prime Minister Yukio Hatoyama’s Democrats are expected to establish an investigation to examine whether the national flag-carrier exploited ties with either the transport ministry or the former conservative government, party member Tsutomu Okubo’s office confirmed to AFP.
The move follows a government announcement of a $3.3 billion injection of public funds and fresh emergency loans of $6.6 billion for Asia’s biggest airline.
Shares in JAL will be officially delisted from the Tokyo Stock Exchange on Saturday, closing their last day of trading at just ¥1 earlier.
The move is set to result in shareholders losing their investment, with shares previously hitting highs of ¥366, following JAL’s integration with Japan Air System in October 2002.
JAL was established as a government-owned entity in 1951, before being and fully privatised in 1987.