Japan Airlines (JAL) is again seeking to step up cost-cutting efforts and is looking to reduce its workforce by 4,300 by March 2009, a year earlier than planned.

“We have sped up the process for headcount reduction...... We now expect to achieve that one year earlier,” a spokesman for the Oneworld alliance carrier says from Tokyo.

JAL 737-800

JAL has been in financial difficulty for several years and has been seeking employee support to step up the pace of restructuring efforts, which have been criticised by some analysts and shareholders as not being aggressive enough.

Earlier this year Asia’s largest airline group unveiled a new four-year restructuring plan under which it said it would step up job cuts and reduce expenditure in many other areas in a bid to return to profitability.

The restructuring plan called for a ¥50 billion ($405 million) reduction in group personnel costs annually starting this fiscal year, mainly through stepped-up job cuts that have been taking place through employee retirement.

JAL said at the time that between 1 April this year and 31 March 2010 it hoped to reduce the group workforce to 48,800 from 53,100.

Plans to accelerate this 4,300-employee reduction by one year come after the carrier failed to meet a target for a return to profitability in the financial year ended 31 March 2007.

JAL has said it desperately needs to restructure its operations ahead of the opening of a new runway at Tokyo’s busy Haneda airport at the end of the decade which will enable new competitors to start challenging it.

The spokesman says the accelerated job cuts will come in part through a voluntary early retirement scheme, adding that VP-level employees were offered early retirement earlier this year and 250 accepted.

Cabin crew were to have been offered early retirement in the next fiscal year but we are “considering it possibly this year” instead and JAL hopes around 600 will accept the offer. It also plans to offer ground staff just below the level of VP early retirement and hopes around 450 will accept.

In addition, JAL plans to make changes to its pension scheme on 1 April that “will lead to a reduction in staff pensions”, says the spokesman.

He says details have not yet been finalised but JAL expects the reduced future commitments will enable it to cut its pension-related costs this year by ¥20 billion.

Related story

Related picture




Source: FlightGlobal.com