The Future of JAL

According to sources at Japan Airlines, a company wide announcement will be made tomorrow regarding departments that were slated to be dissolved yesterday. Employees in departments likely to be highly affected by the restructuring are also expecting more details regarding their fates to be announced at the same time. While the entire restructuring plan is far from decided, JAL plans to cut 8,600 jobs, around 14% of its workforce. Today, Seiji Maehara, the new DPJ Minister for Land, Infrastructure, Transport and Tourism, said bankruptcy is not an option for JAL.

As JAL begins announcing who will go and who will stay, if a healthy chunk of this 14% does not come from the entrenched bureaucracy (which it likely will not), those left behind will be tasked with doing not only the same amount of arguably pointless paperwork, but also their job as well as those of several former coworkers, all why being asked not to request to be paid for overtime. On the other hand, it is not difficult to imagine how a streamlined, efficient airline could navigate the perils of swine flu scares, prodigious pensions, fluctuating fuel prices, and the ever-present threat of terrorism.

Fortunately, Maehara also intends to review the feasibility of JAL’s soon to be released plan. Hopefully under the new DPJ administration, a sustainable plan will be implemented.

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Contributor Bio: Steve has been splitting time between the US and Japan for the past 10 years or so and is now a post doctorate fellow at a large, lumbering University in Tokyo, where he gets paid to play with dirt.

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Canadian

A major Japanese airline company having a full-fledge financial crisis (bankruptcy is not an option?????) is a very new news to me.

http://sullychan.blogspot.com k

Bankruptcy isnt an option, Delta and American airlines are in the running to buy large stakes in JAL, they’re gonna wrap up talks in October or something. JAL has some pretty sweet flight routes that alot of American airliners want, so we’re not looking at bankruptcy, but it could mean a takeover or a merger of some sort… I actually wrote about this im my blog acouple days ago, but no one reads it anyway! haha

steve

A takeover is also not an option because unless regulations change, a foreign company cannot control more than one third of JAL.

k

I read today that delta is looking at getting JAL to join their SkyTeam grouping, and leave their current alliance. While JAL has asked American Airlines for financial assistance.
About the regulations, do you know anything about this “open air skies” aviation treaty? and this airline liberalization thing that the DPJ is talking about? Im, not sure what it entails but it could mean some sort of regulation change.
I’m sure JAL will just end up leaving their current alliance and join up with another.
k

oh yea and i think Delta trying to throw down something like 300 million for a 5 % stake in JAL, which is no where close to what I originally thought. So I guess we’re looking at some kind of joint venture?
steve

Both American and Delta are aggressively pursuing something with JAL. The previous Japanese government favored a tie-up with DL, but I’m not yet sure what the DPJ is thinking. Somehow DL is viewed as being healthier than AA, which is something I don’t really understand, since DL was just in Bankruptcy in 2008. Not to mention they dropped a lot of money to buy Northwest. I see what DL is trying to Do, though, since NW already has extensive service to Japan.

But AA has said they don’t plan to sit by and do nothing. They are trying to get the other OneWorld partners to put up some money for JAL.

I think JAL will stay with AA.

As for open skies, it looks like they want to get an agreement in place by the end of the year. As far as I understand, this would allow US airlines for fly from the US to any Japanese airport with open slots without having its fares regulated by Japan.

Any joint venture would require anti-trust immunity in the US. Obama apparently isn’t too keen on these things.

Man this is complicated
k

yeah its pretty complicated, turns out Toyota is launching a billion dollar campaign in the states now because they’re losing money too.

I dont know if i can follow all this without my head exploding, but thanks.

Luke

Although I agree, but I don’t see how the latter half of your post is relevant.

steve

Relevant to what? The future of JAL or the first half of the post?

The Future of JAL

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