Japan Airlines: Imminent bankruptcy to result in loss of 15,700 jobs

by B. N. Sullivan

Japan Airlines (JAL), which has been struggling financially for some time, is expected to file for bankruptcy tomorrow. As a part of its restructuring plan, the airline will eliminate 15,700 jobs -- one third of its work force, according the the Financial Times. The staff reductions are expected to occur over a period of up to three years, rather than all at once.

"JAL’s bankruptcy could be the largest of a Japanese group outside the financial services sector and would be one of the country’s fifth or sixth-largest," says the Financial Times.

JAL is expected to continue operations during its restructuring. The airline will cease operating more than 20 unprofitable routes.

In 2009, JAL asked pilots, cabin crew, and ground workers to volunteer for two months of unpaid leave, and even suspended part of its pilot training programs to save money. Pensions of pilots and other workers also were reduced.

Two U.S.-based carriers -- American Airlines and Delta Air Lines -- have been embroiled in a bidding war for some of JAL's routes. JAL and American are both members of the Oneworld alliance, but JAL is reportedly considering a move to SkyTeam, which would ally it more closely with Delta, which is already a member of SkyTeam.

Reuters reports:

In recent days, reports have suggested that Atlanta-based Delta, with its strong transpacific route structure, could be irresistible for JAL.

A Japanese newspaper reported on Saturday that JAL has already agreed on a tie-up with Delta.

Reuters also reported that while the Japanese government does not have an official stance on who JAL should ally with, some senior officials in the transport ministry are pushing for JAL to defect to SkyTeam.

Japan Airlines restructuring includes loss of 6,800 jobs

by B. N. Sullivan

Japan Airlines (JAL) has announced plans to reduce its work force by about 14 percent over the next three years. This means some 6,800 of JAL's current 48,000 employees will lose their jobs.

The airline, which is Asia's largest carrier by revenue, also wants to reduce to reduce the pay and pensions of pilots and other workers. Earlier this year, JAL asked pilots, cabin crew, and ground workers to volunteer for two months of unpaid leave, and even suspended part of its pilot training programs to save money.

Today's announced job cuts are part of JAL's restructuring plans, which also include a large reduction in international passenger and freight flights. The Financial Times, quoting a Japanese transport ministry official, reports that "JAL's international and domestic routes are currently split 50-50, but the airline would now focus more on domestic services."

At present, JAL is in talks with Delta Airlines, American Airlines, and Air France-KLM about their possible investment in the Japanese carrier. In return for an infusion of between $200 million and $300 million, the investor airline(s) would gain access to important Asian markets -- China, in particular -- through code-sharing.

As Reuters columnist Alexander Smith writes:

Oneworld and to a greater extent SkyTeam -- which includes Air France and Delta -- are both relatively under-weight in Asia and will seize on any opportunity that comes along. If winning the prize means providing cash to bail out an ailing airline such as JAL, then they see it as a necessary evil.

Smith also mentions the that such a deal might present "an opportunity to push an open skies deal with the United States." At the same time, notes Smith, "nobody is holding their breath for the United States to relax its rules so far as to allow majority foreign ownership -- especially in the middle of a recession."

Japan Airlines Boeing 747 vs Baggage Container

Earlier today at Los Angeles International Airport, the number one engine of a Japan Airlines Boeing 747-400 had a run in with a metal baggage container -- or maybe it was the other way around. The baggage container reportedly was "sucked into the engine" as the aircraft was preparing to depart.

Here's what the Los Angeles Times reported about the incident:

The accident occurred about 1:30 p.m. when Flight 61 to Narita, Japan, pulled back from Gate 101 at the Tom Bradley International Terminal. Airport officials said the vacuum created by the air intake of the left outboard engine was so strong it pulled the empty container off a baggage cart that was either parked or driven too close to the aircraft.

Not surprisingly, that airplane did not go to Tokyo today.

Here's the video:



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Japan Airlines cuts back on pilot training to save money

News from Japan this week says that the country's national flag carrier, Japan Airlines (JAL), is cutting back on aspects of pilot training as a cost cutting measure. Specifically, the carrier is "suspending part of its pilot training programs," including "those in which trainees accompany other pilots at the cockpit aboard actual commercial flights to become familiar with regular air routes, those for gaining promotion to the rank of chief or deputy chief pilots and those for becoming familiar with newly introduced aircraft models," according to an article on the Japan Today website.

The article continues:

A JAL official said the suspensions, which will last until the end of March, "are provisional steps to improve our profitability, so we will continue to provide the training necessary to enable pilots to maintain their maneuvering skills and pertaining to the safety of our flights." While the transport ministry has accepted the step as there is nothing legally wrong with it, some JAL pilots have criticized the suspensions as a move that could undermine safety standards at the airline.

Not surprisingly, JAL pilots do not look kindly upon this move.

"Providing only minimum levels of training is not appropriate to ensure the safety of flights," one JAL pilot said. Another pilot added, "If training is suspended, it will place greater burdens on us when it is resumed."

Apparently part of the cost-cutting focus is not on training per se, but on the cost of accommodation and transportation costs for the pilots and trainers involved.

Separately, Bloomberg News reported late last week that JAL is asking pilots, cabin crew, and ground workers to volunteer for two months of unpaid leave, beginning next month. The Bloomberg article quoted a JAL spokesman who said the airline is anticipating decline in travel during February and March, particularly on its international routes.

Japan Airlines cancels flights due to strike

In anticipation of a strike by three labor unions, Japan Airlines (JAL) has announced the cancellation of nearly a quarter of its domestic passenger flights for tomorrow, October 1, 2008. The strike, which is in response to a wage dispute, will affect about 14,000 passengers as JAL expects to cancel 152 flights within Japan.

The carrier says that no international flights will be disrupted by the strike. According to the Asia edition of the Wall Street Journal, those flights will be operated by non-union crews.

Three unions, including the JAL Japan Pilots Union and the JAL Cabin Crew Union, called the one-day strike to protest JAL's proposed to cut pay for crews and other employees by 5%, beginning in October. According to the Wall Street Journal, the pilots are considering extending the strike into a second day. If that happens, some international flights may have to be canceled.

UPDATE October 1, 2008: The strike by three unions against Japan Airlines has been canceled. Although there is no word on any new pay agreement between the carrier and its unions, JAL has announced, "Services on all flights, both domestic Japan and International, will operate as normal."

JAL adopts 'Electronic Flight Bag' technology for its Boeing 777 fleet

Japan Airlines International (JAL) and Boeing have announced that the airline will equip its entire current and future fleet of Boeing 777 aircraft with the Boeing Class 3 Electronic Flight Bag (EFB), following a validation trial conducted over the past year. JAL has been operating the EFB on two of its 40 Boeing 777s since June 2007.

JAL is scheduled to take delivery of three more 777-300ERs in 2008, all of which will be delivered with the EFB installed. The rest of JAL's 777 aircraft will be retrofitted with EFBs, beginning in April of 2009. All installations should be complete by the end of the 2011, according to Boeing.

"The Boeing Class 3 Electronic Flight Bag is a key aspect of our vision for future operations," said JAL Vice President, Flight Operations Engineering, Mitsuo Koga. "EFB allows us to create a link between our airplanes and ground teams and helps us to be safer and more efficient in our operations."

The EFB combines hardware, software, data and services to create an integrated package that saves money by optimizing takeoff and flight settings, while providing increased safety, efficiency and the ability for airplanes and flight crews to communicate with airline maintenance teams.