Mismanagement and a lack of risk awareness caused Japan Airlines Corp. to file for bankruptcy protection in January, a draft report by a panel studying JAL’s management practices says.
But in the report, to be submitted soon to JAL’s bankruptcy administrator, the five-member panel said it is difficult to place criminal or civil liability on former heads of the carrier, sources said.
The panel said management failed to detect that the airline was in financial crisis because of the firm’s compartmentalized administrative structure in terms of corporate planning, sales and marketing, and other operations, according to the sources.
JAL set up the compliance investigation panel March 2 made up of third-party members who were tasked with examining past management practices.
The panel said JAL was tardy in implementing massive restructuring efforts to improve its balance sheet when it was seeing a decline in passengers due to the Sept. 11, 2001, terrorist attacks in the United States and then the epidemic of severe acute respiratory syndrome, or SARS.
The panel plans to report that JAL needs to change its corporate culture and no longer act with the complacency that it was the country’s flag carrier.
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