Japan Airlines has received permission from Tokyo's District Court to go ahead with its rehabilitation plan.
The Oneworld carrier says 96% of creditors approved the plan.
"We will put forth our best efforts to implement the plan for a swift and successful restructuring, with the leadership of the newly appointed board members," says Japan's flag carrier.
The airline filed for bankruptcy protection in January after incurring severe losses for successive years, and was de-listed from the Japanese stock exchanges. It unveiled its restructuring plan in August, and expects to implement this in December. The carrier recently added new executives to its management team to help with the process.
Under the plan, JAL's creditors will forgive ¥521.5 billion ($6.23 billion) of its debt. Japan's Enterprise Turnaround Initiative Corporation (ETIC), which was tasked to turn JAL around, will give the airline a pay-in of ¥350 billion in December. JAL will in turn issue the ETIC with 175 million new shares. It is also seeking an additional ¥50 billion, and is in negotiations with the ETIC and various banks for this.
JAL says it will retire 103 aircraft as it seeks to reduce the number of aircraft models in its fleet and use smaller, more efficient aircraft. It will phase out all Boeing 747-400s, Airbus A300-600s, MD81s and MD90s from its fleet by end-March 2011. Instead, it will deploy small and medium-sized aircraft such as the 737-800, Embraer 170 and the 787, which will be "key to [its] future international route strategy".
On its route network, JAL will focus on operating more frequent services on domestic routes using smaller aircraft. It will concentrate its international route planning around major US and European cities as well as high-growth Asian routes, says the carrier. It announced in April that it would suspend operations on 45 routes.
In addition, JAL will cut 16,114 jobs by end-March 2011, resulting in a total workforce of 32,600. It will carry out the job cuts through early retirement and the sale of subsidiaries, it adds. On top of this, the airline will review wage systems and downsize airport facilities among other measures to cut costs further, says JAL.
The carrier will also consolidate its group operations by the end of its current fiscal year, ending 31 March 2011. Its core business Japan Airlines International (JALI) will merge with holding company Japan Airlines Corp and three other subsidiaries to form a single entity. On 1 April 2011, JALI will change its name to Japan Airlines Co.
Following the pay-in from the ETIC and the issue of shares, JAL will have capital of ¥175 billion and capital reserves of ¥175 billion, says the airline.
Earlier this month, it said that it is on track to make an operating profit this year, report a net profit next year, and be re-listed on Japan's stock exchanges in the first half of 2013.
Source: Air Transport Intelligence news
