Japan Airlines to cut 8 percent of its workforce
There is no word yet on whether the cuts will affect Hawaii
TOKYO » Japan Airlines Co. announced yesterday that it will cut 4,300 employees, or about 8 percent of its entire work force, by the end of fiscal 2009 after it reported a net loss for the most recent quarter.
The airline did not indicate whether the cuts would affect its station in Hawaii, which is one of the destinations where it said traffic has been stagnant.
JAL said it would cut 4,300 employees from its payrolls by March 2010 ,from the current 53,100, as part of its four-year business plan aimed at boosting profitability. This comes on top of the ongoing elimination of 6,000 ground jobs for the period from through March 2008, announced several years ago. JAL has also been scrapping flights and trimming other costs to turn around its sagging business.
Gilbert Kimura, the spokesman for Japan Airlines in Hawaii, said he hadn't received any information about the layoffs and couldn't comment about any effect on the local work force of 190 employees.
However, he said each overseas region has just enough workers to handle the jobs.
"Most of the time, large changes in the Japan region rarely affect the overseas stations," Kimura said. "Normally, what goes on in Japan has to do with the Japan region. But with high fuel costs, it's getting harder and harder to say."
The company expects to cut 50 billion yen (US$416.7 million) in annual labor costs beginning fiscal 2007 from the current fiscal year, and boost a group operating profit to 35 billion yen (US$291.7 million) from 13 billion yen (US$108.3 million) this fiscal year.
Japan's No. 1 carrier is still struggling to regain customer confidence after a spate of safety lapses in recent years have prompted passengers to opt instead for rival All Nippon Airways.
JAL, as the airline is known, reported a net loss of 10.8 billion yen, or US$89.9 million, in the October-December quarter, slightly less than the 11 billion yen loss it recorded for the same period in 2005.
Quarterly sales rose 4.9 percent to 584.1 billion yen (US$4.9 billion), from 556.9 billion yen a year ago.
Cargo traffic from Japan to China was strong, but was weak to the U.S. in the latest quarter.
Tourism to Guam and Hawaii was stagnant, and poor snowfall caused a drop in domestic ski travel, JAL said.
Soaring fuel costs continue to be a problem, JAL said, although oil prices have eased since October. The airline is taking up fuel hedging and fuel consumption reductions, but the fuel bill during the nine months was up 12.8 percent at 320.4 billion yen (US$2.7 billion) from the same period a year earlier, it said.
JAL suffered a huge net loss of 47.2 billion yen (US$393 million) in the fiscal year through March 2006 on soaring jet fuel prices and weak passenger demand.
Star-Bulletin reporter Dave Segal and Associated Press reporter Mari Yamaguchi contributed to this report.