JAL firms cut jobs before restructuring plan starts

Kyodo News

Two Japan Airlines group firms have already carried out job cuts by soliciting early retirements, even though the airline hasn’t officially decided on a restructuring plan, according to sources.

The struggling airline submitted a draft restructuring plan to the government in September that included the elimination of around 6,800 group employees, or about 14 percent of the overall workforce, over the next three years.

The government recently set up a five-member task force to reassess the turnaround plan, but it is likely JAL will need to implement wide-scale job cuts regardless of what plan it uses.

Jalpak Co., which operates overseas package tours, solicited applications for an early retirement program for about a month in early July and received a little less than 60 applications. The company plans to raise efficiency by shifting its retail operations in Japan to units of another JAL subsidiary, JAL Sales Co., the sources said.

Another subsidiary, Hotel Nikko Osaka Co., also offered an early retirement package as part of measures to adjust its workforce after ending operation last March of a hotel adjacent to the Universal Studios Japan theme park.

The sources did not disclose the exact number of people who applied for early retirement.

JAL said Wednesday that it and group companies carried 1.04 million passengers on international routes in August, down 4.3 percent from a year earlier.

The decline in passenger numbers slowed for a second consecutive month as JAL scrapped fuel surcharges from July to September on top of summer demand for flights.

The JAL group carried 3.72 million people on domestic routs in August, down 10.1 percent.

On a preliminary basis, passengers aboard international JAL flights increased 5 percent in September for the first year-on-year gain since December 2007.