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With Sunday marking the 10th anniversary of Japan Airlines’ bankruptcy — the largest nonfinancial business failure in the nation up to that point — questions and criticisms remain over the generous state assistance provided to the company to help it dig itself out of from under debts totalling some ¥2.3 trillion.

“We caused trouble to many parties concerned, including our shareholders, related government agencies and ministries, as well as partner financial institutions,” JAL President Yuji Akasaka said in an interview.

“There are many people who are still suffering … and we never think that we have restored trust 100 percent,” he said. “By contributing to society through our businesses and developing continuously, we hope to recover trust.”

Japan Airlines achieved a swift recovery thanks to the public funds, job cuts and management reform launched under the leadership of Kazuo Inamori, the founder of Kyocera Corp., who was brought in at the time to turn the company around.

But before the bankruptcy, poor business results were the norm at JAL, which had many issues such as a fleet of large aircraft with poor fuel efficiency and high pension payments to retirees.

The government at the time was led by the now-defunct Democratic Party of Japan. The then-administration decided to employ the government-backed Enterprise Turnaround Initiative Corp. of Japan to carry out drastic reforms at the airline.

After making arrangements to prevent the bankruptcy from causing flight service suspensions, the government compelled JAL file for legal liquidation.

Public funds totaling ¥350 billion were injected through the turnaround body, and JAL’s creditor banks agreed to write off debts totalling about ¥521.5 billion.

Individual shareholders also suffered due to JAL’s delisting from the stock exchange and a 100 percent reduction in JAL’s capital.

Inamori, who became JAL’s chairman at the request of the DPJ-led government, changed the company’s corporate culture by introducing such measures as the “amoeba” management system, in which each division, or amoeba, pursued its own profits.

“Before the bankruptcy, our management and workers lacked cost awareness and responsibility,” Akasaka said.

“This changed immensely thanks to the leadership of (then-)Chairman Inamori,” he said.

By cutting 16,000 jobs, including through dismissals, JAL posted a consolidated operating profit of ¥204.9 billion for the year to March 2012. The company was returned to first section of the Tokyo Stock Exchange in September of that year.

While JAL achieved a V-shape recovery, critics said the bailout went too far.

“Some in the government at the time thought JAL should be allowed to go out of business, but I thought there should be an environment where JAL and All Nippon Airways compete with each other,” then-transport minister Seiji Maehara said.

“Some say the assistance was unfair, but they say so because the reconstruction went well,” Maehara said in a separate interview.

The transport ministry tried to mitigate the imbalance by closely monitoring JAL’s management practices and restricting new investments while giving preferential treatment to ANA when allocating departure and arrival slots at Tokyo’s Haneda Airport.

Since the ministry ended its monitoring at the end of March 2017, JAL has steered itself into a new growth direction.

The company is planning to launch a budget flight service in May this year. The airline also hopes to capitalize on the business opportunities that 2020 Tokyo Olympic and Paralympic Games this summer will provide.

“While increasing the number of international flights, we will also pursue new businesses,” Akasaka said.

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