Japan Airlines to slash 15,600 jobs
January 11th, 2010 - 9:54 pm ICT by IANSTokyo, Jan 11 (DPA) Japan Airlines (JAL) is to shed one-third of its workforce - 15,600 jobs - as part of a far-reaching restructuring plan, media reports said Monday.
The job cuts are dictated by a state-backed recapitalisation plan to extend to March 2013, which would also include wage cuts and divestments according to the Japanese news agency Kyodo.
Following the restructuring, the company plans to file for bankruptcy, the news agency quoted “sources familiar with the matter,” as saying.
According to the Wall Street Journal, JAL’s most important institutional creditors oppose the plan.
The state-backed organisation in charge of the restructuring, the Enterprise Turnaround Initiative Corp (ETIC), set a provisional date of Jan 19 for its decision.
The plan includes a provision to reduce pension payments to former employees by 30 per cent. But that would need approval of two-thirds of the affected retirees, which media reports indicated was unlikely.
The pensioners are concerned about further reductions in light of JAL’s likely bankruptcy, the report said.
The ETIC is also expected to request that JAL turn down recent investment offers from US rivals American Airlines Inc and Delta Air Lines Inc, because that would complicate the restructuring process.
The state-run agency estimates JAL’s liabilities at 860 billion yen ($9.3 billion) in excess of its assets. The ETIC hopes to use the bankruptcy procedure to close the gap, reducing the company’s debt by 730 billion yen and investing 300 billion yen to increase asset value.
The airline is currently dependent on emergency government loans.
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Tags: american airlines, asset value, bankruptcy procedure, creditors, delta air lines, delta air lines inc, emergency government, etic, further reductions, government loans, jan 19, japan airlines, japan airlines jal, japanese news, kyodo, news agency, pension payments, pensioners, wall street journal, yen
