Japan Airlines Corp. on Nov. 30 received approval from the Tokyo District Court for its reconstruction plan. JAL achieved a consolidated operating profit of ¥132.7 billion in the April-October period helped by a strong yen and a temporary upturn in the Japanese economy.
But the reconstruction of JAL won't be easy, given its internal problems and possible competition from low-cost carriers. It needs to turn itself into a competitive firm within two years or so.
The main features of the rehabilitation plan are: a ¥521.5 billion debt waiver from banks, debt rescheduling by the end of March 2011, a ¥350 billion investment in JAL by its bankruptcy administrator, the stated-backed Enterprise Turnaround Initiative Corp. (ETIC), slashing of some 16,000 jobs of the group workforce to some 32,600 by the end of March 2011, decommissioning of 103 fuel-guzzling aircraft, and the termination of 39 domestic and 10 international money-losing air routes. JAL must achieve a consolidated profit of ¥117.5 billion in the April 2012-March 2013 period.