How does a company recover from a sullied reputation?

According to Japan Airlines Corp. President and Chief Executive Officer Haruka Nishimatsu, the key is securing an open flow of communication at all levels in the firm.

Poor communication between management and regular employees, as well as among employees, has been blamed for a variety of crippling problems at the nation’s flagship carrier.

“We’re reviewing the quality of our services thoroughly at many levels, and younger employees are openly making many suggestions,” Nishimatsu said during an interview Thursday with The Japan Times.

On Oct. 1, JAL, the largest domestic carrier, completed its merger with Japan Air System Co., the No. 3 airline, agreed to in 2002, hoping to become more competitive.

However, the results have been the opposite.

In fiscal 2005, JAL fell into the red, with a group net loss of 47.2 billion yen. Despite restructuring efforts, the firm still had a net loss of 26.7 billion yen in the April-June first quarter of this business year.

Integrating the two corporate cultures has been tougher than expected. In addition to safety missteps last year, management strife surfaced in February. JAL also saw many travelers switch to its competitors, including top rival All Nippon Airways Co.

JAL, however, managed to see an increase in overall passenger numbers in August from the previous year for the first time in 14 months.

Nishimatsu said passengers on tour packages are returning, but business class passengers and individual economy class travelers have not yet returned on a large scale.

“It’s hard to get these customers back once they think JAL has too many problems,” he said.

To ensure safety and regain the public’s trust, Nishimatsu said the entire firm is sharing information on “failure issues.”

“The strength of the JAL brand has been the quality of its service,” Nishimatsu said. “I believe consumers have high expectations of us, and we haven’t met that criteria yet.”

The completion of the JAL-JAS merger will also help the employees share their ideas on safety issues, he said.

Nishimatsu is transferring more than 80 employees from JAL headquarters in Shinagawa Ward, Tokyo, to the trenches, including Haneda and Narita airports, with the aim of promoting the flow of information on both sides. He plans to raise that number to 150.

“It’s important for (people on) the frontline to increase their quality of work, but it’s also important for people (at headquarters) to see” the real situation and also improve the quality of their work, the JAL chief said.

For his part in promoting communication and improving service, Nishimatsu visits the JAL lounge at Narita International Airport in Chiba Prefecture on Sundays to chat with people waiting for flights.

The airline is aiming for a group net profit of 3 billion yen in the current fiscal year and will release its midterm financial report in November.

Galaxy code-sharing

Kyodo News Japan Airlines Corp. announced Thursday a code-sharing deal on cargo flights with Galaxy Airlines Co., a new air freight carrier set to begin domestic flights Oct. 31.

Under the deal, JAL will buy some 10 percent of cargo space on each Galaxy flight starting Nov. 7, and has set a target of transporting 6,000 tons of cargo annually.

Galaxy is 55 percent owned by SG Holdings Co., the parent of courier Sagawa Express Co. JAL has a 10 percent equity stake in Galaxy and provides operations and aircraft maintenance services for Galaxy.

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