Top 2 JAL executives
resign amid losses

The airline may sell some hotels
to focus on its core business

From staff and wire reports

TOKYO -- The chairman and president of Japan Airlines Co., the nation's biggest airline, are planning to resign over projected losses at the airline because of increasing competition and failed resort developments.

President Akira Kondo told reporters today he and Chairman Susumu Yamaji will step down at the company's annual shareholders meeting in June. Kondo is 63 and Yamaji is 72.

Isao Kaneko, 60, an executive managing director, is expected to replace Kondo, the Nihon Keizai business daily reported. The two will resign to take responsibility for a 150 billion yen ($1.2 billion) write-off by the airline.

The write-off will force the airline to post a loss of $752 million for the fiscal year ending March 31.

Senior Vice President Tatsuru Fukaya blamed more than half of the losses on hotels in the United States and resorts in Southeast Asia that the airline built or bought in an ambitious expansion in the 1980s.

JAL's U.S. holdings include the 390-room Ihilani Resort & Spa in at Ko Olina in West Oahu, owned by its Pan Pacific Hoteliers Inc. unit.

JAL will take a special loss of 97 billion yen to restructure its hotel and resort operations to concentrate on its core airline business, Kondo said. Several of these properties could be sold, Fukaya said.

(A local JAL spokesman said he was not aware of any plans to sell or restructure the airline's local real estate holdings.)

"We will concentrate our management resources on our main business" of commercial air service, Fukaya said at a news conference.

Additional cost-cutting measures include trimming 1,500 ground crew jobs.

Japan Airlines has seen profit margins evaporate as trade agreements with the United States and deregulation in Japan's domestic market increase competition and force the airline to cut prices.