Japan Airlines (JAL) has finalised a restructuring initiative that will include early retirement of older aircraft and salary cuts after its financial position deteriorated.
Asia’s largest airline group now expects to complete the retirement of its 30 older Boeing 747-200/300s in the fiscal year ending 31 March 2010. Original plans called for the retirement of these older 747s by the 2012 fiscal year.
In the 2007 and 2008 fiscal years, JAL also plans to expand the number of routes it serves with “middle- and small-size aircraft” rather than larger 747s and777s. It classifies mid-size aircraft as its widebody Boeing 767s, 787s and Airbus A300-600s, and small aircraft as its 737s and MD-80/90s.
“By continuing fleet downsizing, JAL will increase the percentage of middle- and small-size aircraft from the present 40% to about 60% by the end of fiscal 2008,” it says.
Meanwhile, JAL is seeking across-the-board salary cuts. It expects these to be in place over the January 2006-March 2008 period and says negotiations will be held with labour unions.
There is expected to be an 8% reduction in the basic salary of “regular staff” and a 10% cut in the basic salary of middle management employees. It also plans to further reduce the remuneration of board members by 23% to 40%.
JAL’s financial position has been deteriorating as costs have gone up, largely because of rising fuel prices. It recently reported falling into the red in the first half to 30 September and forecast hefty losses for the full fiscal year.
In May JAL said it expected to record profits for the year to 31 March.
NICHOLAS IONIDES/SINGAPORE
Source: Flight International
