17-Sep-2009 10:37 AM

Japan Airlines to reduce network as part of restructuring efforts, AF-KLM & BA interested

Japan Airlines, as part of the carrier’s restructuring efforts, reportedly plans to enact the following measures (in conjunction to measures previously reported) (Antara/Reuters/AFP/The Yomiuri Shimbun, 16-Sep-2009):

  • Labour Cost Reductions: Reportedly plans to propose to former and current employees to reduce pension benefits and spread out its obligations over a longer period. The carrier’s pension benefit rate currently stands at 4.5%, which the carrier reportedly plans to lower to below 4%. For current employees, the carrier reportedly plans to lower the benefit rate to below 2%;  
  • Capacity reductions: Reportedly plans to suspend 50 domestic and international routes by the end of FY2011. The carrier will reportedly suspend 29 (or 20%) of its domestic routes and 21 international routes, reportedly including services from Tokyo to Rome, Mexico and Sao Paulo and from Osaka to Dalian;  
  • Airports: Reportedly plans to withdraw from seven domestic airports, including those in Kobe, Shizuoka and Hokkaido prefectures, and nine overseas airports;
  • Agreement with foreign airlines: Air France-KLM and British Airways are also reportedly in talks to invest in Japan Airlines.

Japan’s new Transport Minister Seiji Maehara stated he would review JAL's turnaround plans to determine whether the State-supervised revitalisation for the carrier is feasible (Reuters, 16-Sep-2009). Mr Maehara has previously questioned the heavy involvement by government in the aviation industry and urged further deregulation.

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