JAL Voluntary Retirement Fails Company Will Layoff Flight Crews


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JAL Voluntary Retirement Fails Company Will Layoff Flight Crews

Steve Hall

November 21, 2010 - Japan Airlines reported it will layoff up to 250 pilots and flight attendants as a result of its voluntary retirement program failed to meet company job reduction targets. In 2009, Japan Airlines suffered steep financial losses, despite remaining Asia's largest airline by revenue. As a result, the airline embarked on staff cuts and route cutbacks in an effort to reduce costs. 

Japan Airlines attempted to cut 270 positions through a voluntary retirement program, the goal was to eliminate 130 pilots and 140 flight attendants. However, the company?s voluntary retirement target fell short when only 20 pilots and 50 flight attendants applied under the voluntary retirement program.   

?We are in a very difficult situation with regard to carrying out further steps to implement our restructuring plan. We have reached the decision that we have no choice but to dismiss personnel to achieve an appropriate size of workforce,? said a company spokesperson.  


After weeks of speculation, JAL applied for court protection under the Corporate Rehabilitation Law (the Japanese equivalent of Administration (UK) or a Chapter 11 Bankruptcy (US) filing) on January 19, 2010. JAL expects to receive a ?300 billion cash injection and have debts worth ?730 billion waived, in exchange for which it will cut its capital to zero, cut unprofitable routes and reduce its workforce by 15,700 employees, a third of its 47,000 total. 

JAL's main creditors (Mizuho Corporate Bank, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation) originally objected to the bankruptcy declaration, but changed their mind after the Enterprise Turnaround Initiative Corporation of Japan recommended court protection, according to a senior bank official. 

Shares of JAL were delisted from the Tokyo Stock Exchange on February 20, 2010. Leading JAL's restructuring efforts is CEO Kazuo Inamori, founder of Kyocera and KDDI. Japan Air Commuter President Masaru Onishi will be promoted to president of JAL. 

Back in July, Japan Airlines proposed pilot pay cuts of up to 30 percent and 25 percent pay cuts for its flight attendants. The goal in part was to show its main lenders that the carrier is willing to cut pay in addition to cutting jobs. At the time the pilots and flight attendants union agreed with the carriers move to cut pay if it meant saving the company.

    In May 2010, JAL began to see an increase in its passenger number by 1.1% year-on-year. In August 2010, it was reported that JAL would cut 19,133 jobs from its workforce of 47,000 by the end of March 2015 - whilst also increasing capacity - in an attempt to make the business viable.

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