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JAL discussing plans to separate operations; to cut up to 60% of services from Kansai

23-Sep-2009 10:29 AM

Japan Airlines' (JAL) primary creditors and the Japanese Government are reportedly examining a plan to accelerate its rehabilitation by separating the carrier's profitable operations from its unprofitable segments (Kyodo, 23-Sep-2009). They are also reportedly studying the possibility of using a special public fund to help strengthen JAL's financial position. 

JAL is also reportedly considering eliminating approximately 60% of its international services (approximately 21 international routes) from Kansai International Airport, with services to Incheon, Singapore and Hanoi reportedly to be discontinued prior by the end of FY2009 (Nikkei Business Daily/Reuters, 22-Sep-2009). The reductions are part of proposed plans to eliminate up to 6,800 jobs and 50 unprofitable routes (including 21 international routes) by Mar-2012, to reduce operating costs by 30%.

However, JAL, in a statement to the Tokyo Stock Exchange, stated reports about its current financial state and its reorganisation are “inconsistent with the facts” (Bloomberg, 22-Sep-2009). Further details were not disclosed.