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JAL sees positive changes one year after bankruptcy; challenges remain

20-Jan-2011 10:30 AM

Japan Airlines Corp Chairman Kazuo Inamori stated he has witnessed a number of positive changes in the struggling airline’s restructuring efforts since it filed for bankruptcy protection on 19-Jan-2010 (Kyodo News/Yomiuri Shimbun/Dow Jones/AFP, 20-Jan-2011). The carrier has withdrawn from unprofitable routes, and now operates 20% fewer routes than prior to its bankruptcy. The airline also plans to reduce its workforce by 16,000 by Apr-2011, two-thirds of its size prior to its collapse. The carrier is also increasingly focussed on building relationships with other international carriers and has withdrawn around 36 older aircraft from its fleet. JAL plans to become a listed corporation again at the end of 2012. The carrier posted an operating profit of USD1.8 billion in the eight months to Nov-2010. Challenges do, however, remain, with ANA attracting many passengers away from JAL. It also remains uncertain whether JAL can generate enough cash flow to finance debt and the carrier is facing new threats from LCCs and the high-speed rail network in the domestic market.

Japan Airlines: ‘‘JAL’s bureaucratic culture has changed significantly, triggered by the bankruptcy. Corporate performance itself has also improved. I am delighted," Kazuo Inamori, Chairman. Source: Kyodo News, 20-Jan-2011.