Akira Kondo, president of Japan Airlines Co., and Susumu Yamaji, JAL's chairman, will step down in June to take responsibility for the carrier's poor performance, it was announced March 17.
Isao Kaneko, currently senior managing director, is expected to succeed Kondo following a board meeting to officially select the company's new head in June. It remains unclear who will take over Yamaji's post, Kondo said.
The carrier also announced that it will use 154.6 billion yen in internal reserves to make up for a 57.6 billion yen accumulated loss held by JAL and a 97 billion yen loss held by its affiliated companies. "We would like to clear the losses of JAL itself and our affiliated companies to make a fresh start," Kondo said. "Although we would like to apologize to our shareholders, we hope to start paying dividends from the next business year."
The resignation of the top officials is aimed at renewing the confidence of employees and rejuvenating the firm's management, Kondo said. The loss accumulated by the affiliated companies mainly comes from the poor performance of overseas hotel and resort businesses, managed by JAL Hotels. The company operates about 50 hotels in Japan and overseas, according to JAL officials.
Kondo said the internal reserve will be used this year because of intensifying competition in the airline business and the current trend of evaluating companies on a consolidated basis.
JAL revised its net profit forecast from zero to a 97 billion yen loss on an unconsolidated basis in the current business year that ends in March 1998.