It's end of March and Japan Airlines (JAL) only have 3 more months to finalize their restructuring plan. Here are a few updates on JAL restructuring progress.
- JAL's largest union agrees to the 5% pay cut starting from April 1. This alone will save JAL 300 billion yen. (Nikkei)
- JAL plans to increase the number of early retirement cut from 2,700 to 7,500. This is almost 3 times the original planned number. (Manichi Daily News)
- Total number of job slashed by fiscal year 2012 will increase from 15,700 to 20,000. (Manichi Daily News)
- JAL plans to abolish more routes, especially international routes. (Manichi Daily News)
- ETIC decides to acquire 190 billion yen of loans from JAL lenders (Nikkei)
- The three mega banks have become inpatient with JAL restructuring progress and have asked ETIC to acquire all of their outstanding loans! They think the proposed personnel and route cuts are insufficient. (Daily Yomiuri Online)
- JAL will suspend fresh college graduate hires in spring 2012. This year, JAL has hired 141 college graduates. (iza.ne.jp)
Union playing nice is good news and Oneworld partner CX could learn from JAL on how to communicate with their unions! But that's the only good news in this update. The move from the three mega banks are indeed concerning. If JAL and ETIC can't get the agree with the restructuring plan, that means the banks will be reluctant to finance JAL in the future. Their latest move actually caught ETIC off guard too because their original plan was to only purchase loans from smaller JAL lenders. That's probably why JAL has to increase the personnel cut to 20,000, which is around 40% of the workforce. I wish JAL would release the list of routes that are in danger or are certain that they will be cut. But they probably don't want to do this because it will further lower the demand on those flights.
Hopefully JAL can make more progress and resolve the differences with the banks as soon as possible. JAL's restructuring won't be successful without their support :(
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