Japan Airlines to cut 16,000 jobs

Japan Airlines to cut 16,000 jobs

Japan Airlines is to slash a third of its workforce, more than 16,000 jobs, and close 49 unprofitable domestic and international routes as part of its radical restructuring plan.

The company also intends to cut 103 aircraft, mainly aging 747s, from its fleet.

The announcement comes after the airline filed for bankruptcy protection on 19 January.

Some of the job reductions will be gained through early retirement and the sale of subsidiaries.

“By fully implementing these measures, the JAL Group will aim to become profitable from the first fiscal year of the plan and thus rehabilitate quickly,” the airline said in a statement.

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It said its headcount would be cut from 48,714 at the end of 2009 to 32,600 by the end of this year.

JAL has been hit hard by falling passenger numbers during the global economic downturn and faces an increasing challenge from Japanese rival All Nippon Airways.

However the new plan was short on details about how JAL would increase its revenue – a crucial factor amid increased competition from low-cost carriers and other international airlines as both Narita International Airport and Haneda Airport, the main gateways into Tokyo, expand their capacity.

The former flag carrier said it was considering launching a low-cost airline subsidiary, but declined to elaborate.

The restructuring plan is being orchestrated as part of a government-backed bail-out after JAL’s bankruptcy in January with more than $25bn in debt.

The bankruptcy of Japan Airlines was one of the country’s biggest corporate failures to date.