20-Oct-2009 10:28 AM

JAL turnaround plan to be finalised a month earlier than expected

Japan Airlines (JAL) is reportedly considering the following measures, as part of its new turnaround plan, which is expected to be finalised by the end of Oct-2009 and be launched in early Nov-2009, a month earlier than expected (Kyodo/The Yomiuri Shimbun/AFP/Reuters/Bloomberg/Financial Times/New York Times, 19-20-Oct-2009):

  • Government involvement: The Japanese Government will reportedly push for a quick adoption of a recovery plan for the carrier, with the government signaling its intention to impose more radical changes on JAL than the previous administration;
  • Financial outlook: Will reportedly post a larger-than-expected group operating loss of approximately JPY200 billion (USD2.2 billion) in FY2009 (to Mar-2010), for a second consecutive year of operating losses, reflecting significant restructuring costs and weak demand, according to Kyodo News. The loss is reportedly more than three times larger than its previous estimate. The carrier’s five-year turnaround plan aims to raise operating profit to JPY50 billion (USD550 million);
  • Subsidiaries: Reportedly reconsidering plans to sell JAL Hotels, a subsidiary which operates 60 hotels in Japan and overseas, and to close 27 offices globally over the next two years as part of its restructuring efforts;
  • International partners: Reportedly resumed talks with Delta Air Lines and American Airlines over a possible capital alliance, according to Bloomberg. The news comes after JAL reportedly suspended official talks with the US carriers last month, aiming to focus first on its own revival plan; 
  • Creditors: Have rejected the carrier's restructuring plan and are reportedly seeking a reduction in debt waivers and details of the use of state funds.  

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