Japan Airlines' (JAL) employees have agreed to proposed changes to their pension plan as part of a wide-ranging cost-cutting measure, with the carrier hoping that its retired employees will agree to a similar proposal by next week's deadline.
"As of yesterday, two-thirds of our employees had agreed to the change. That means that we can go ahead with the proposal," says a spokeswoman. "On average, this will reduce the pension payments by about 50%. The final reduction will depend on a variety of factors, including the length of service."
The carrier is hoping that a majority of its 8,800 retired employees will agree to the proposed changes to their pension plans by the deadline of 12 January. Under the plan, JAL could cut their pension payments by up to 30%. So far, 3,000 pensioners have given their consent, says the spokeswoman.
"We need the approval of two thirds of our retired employees, and we think that is possible to get that. Around 85% of our retired employees responded to an earlier survey on the issue and, of those, 75% of them said they would agree to a change," says the spokeswoman.
The ailing carrier posted a fiscal second quarter net loss of ¥32.1 billion ($348 million) and has applied to the government-backed Enterprise Turnaround Initiative Corporation of Japan (ETIC) for a bail-out. The government, in turn, has asked JAL to undertake massive reforms to cut its costs and streamline its operations.
Japan's transport minister has not ruled out a Chapter 11 style bankruptcy, which would give JAL protection from creditors while it restructures. The carrier, in the interim, is getting around ¥200 billion in loans from Japan's state-run Development Bank of Japan (DBJ) to cope with its short-term financial needs.
Source: Air Transport Intelligence news
