Japan Airlines (JAL) is to step up cost cutting efforts in a bid to improve a financial performance which saw group losses reach ´94.2 billion ($710 million) in the year to the end of March.
The group is adding further measures to reduce costs by 10% - a ´100 billion reduction - by April 2001, as part of a restructuring programme announced in March.
Two areas are being targeted for cost cutting, says JAL. "There will be a further reduction in groundcrew levels, on top of the 1,200 already announced. Although the exact numbers have yet to be decided, there could be between a further 300 and 500 lay-offs. In addition, we will postpone the purchase of three widebodied aircraft in fiscal year 2000, saving an estimated ´60 billion," the airline says.
JAL has been hit by sluggish passenger demand and losses from its hotel and resort businesses. "Companies have been inclined to limit business trips, and ticket prices continue to decline amid sluggish economic conditions," says the airline. Despite the problems, the group is forecasting a return to profitability this year.
Source: Flight International
