JAL to cut workforce to stave off bankruptcy

15th Sep 2009
JAL to cut workforce to stave off bankruptcy

Japan Airlines has announced that it will cut its workforce by 14%, or 6,800 employees, in a bid to stave off bankruptcy, according to the [http://europe.wsj.com/home-page]Wall Street Journal[/url].

The national flag carrier has been mired in union negotiations since reporting its biggest quarterly loss of almost $1 billion in the three months to the end of June.

The news comes at the same time as two US carriers are making a play for a stake in the airline.

Both American Airlines and Delta are currently in talks with JAL, which should conclude by mid-October.

Although both US airlines are not in good financial health – Delta also had a $1 billion quarterly loss to June 30 – they are desperate to carve out a position in lucrative international business travel routes.


Delta is currently just one of two US airlines – United is the other – permitted to fly to Japan’s main airport, Narita, under current bi-lateral agreements.

However, both countries are in talks to relax restrictions and American is keen to stake a claim on the route.

However, if Delta were successful it would be a huge blow to American and its Oneworld partners as JAL would be forced to leave to join rival alliance Skyteam.

American currently codeshares with JAL and is expected to call on its Oneworld partners, which include British Airways, to make a stake in JAL.

JAL hopes that any investments will prompt other investors to put money into the airline, which is estimated to need a further $2.5 billion just to make it to the end of the year.


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