The Japan Airlines Corp. group is planning to cut monthly wages by 5 percent and forgo bonus payments as part of its restructuring process, sources said Thursday.
The move, which also includes suspension of annual raises and promotions, will affect about 16,000 employees alone at key subsidiary Japan Airlines International Co.
JAL will aim to implement the measures starting April 1 after submitting the proposal to its eight labor unions for a revision of the company's wage system for the business year through March 2011, the sources said.
The carrier, which has filed for court protection and whose turnaround is being sponsored by a government-backed body, expects to cut costs by more than ¥30 billion with the wage reduction by implementing similar measures for its group employees.
The latest decision follows a move in December when no JAL employee got a bonus. But the carrier may consider paying a bonus of about two weeks worth of salary in summer and at the end of the year if its earnings recover, to thank employees for their cooperation in the rehabilitation process.
Pilot pay — often criticized as too high — will likely be cut as well. JAL previously guaranteed pilot wages for 65 flying hours per month regardless of actual working conditions. It will aim to cut the guaranteed hours to 50 per month by the end of the 2010 business year, according to JAL.