POSTED: Tuesday, May 05, 2009

Japan Airlines' subsidiary, looking for ways to cut costs to deal with the slumping global economy, has terminated the assignments of all 130 of its Honolulu-based pilots and is closing its Oahu office.

The nonunion pilots, who were on individual contracts, had been hired by JALways Co. Ltd. from three leasing companies that provide pilots to foreign carriers. The pilots had been flying Boeing 747s from Hawaii to Japan and other Asian countries.

Most of the pilots' contracts were for three years, but JALways ceased the pilots' flying on March 31. JALways will continue to pay the pilots' wages and full benefits through June.

JALways, which will close its Honolulu office at the end of June, also is laying off five local employees from that office.

The JALways office handled the dispatching and scheduling of flights for the Honolulu-based pilots. Japan Airlines has a separate office in Honolulu to handle those functions for its own operations.

A local Japan Airlines spokeswoman referred calls to the company's Los Angeles spokeswoman, Carol Anderson, who confirmed that no Hawaii flights were affected, but that other questions would need to be answered by a spokesman in Tokyo. He did not respond to e-mailed questions.

Hawaii Aviation Contract Services owner Alexander Bell, whose Honolulu-based company provided JALways with 18 pilots, said there was a reduction in pilots because “;routes were canceled (globally) and airplanes were sold.”;

“;There are more pilots than were needed to do the jobs, and so Japan Airlines thought the best thing to do was the reduce the number of pilots,”; he said. “;And, obviously, the first to go would be the expats.”;

Redwood City, Calif.-based IASCO said that 62 of its pilots were terminated, while Las Vegas-based World Aviation Systems Inc. said it lost about 50 pilots.

The five round-trip daily flights between Hawaii and Japan that the Honolulu-based JALways pilots used to operate are now being flown by Japan Airlines pilots who are based in Japan. A sixth daily flight between Hawaii and Japan already had been operated by Japanese national pilots for Japan Airlines.

Bell, a former Hawaiian Airlines pilot whose company also works with Japanese carriers All Nippon Airways Co., Nippon Cargo Air and Star Flyer, said he has been trying to place the terminated pilots with those companies and that eight of the affected 18 pilots from Hawaii Aviation are in the process of being interviewed or will be interviewed “;down the road.”; Hawaii Aviation is also trying to find positions for the displaced pilots from the other two leasing companies as well.

Last week, Japan Airlines said it would post a net loss of Yen63 billion ($657 million)—nearly double the Yen34 billion it forecast in February—for its fiscal year that ended March 31.

“;Decrease in air transport demand on a global scale has been relentless, and it has taken a toll on the JAL Group's international and domestic passenger revenue as well as international cargo revenue,”; JAL said. “;Premium travel out from Japan slid against the backdrop of continuous cost-cutting measures by companies in this economic situation.”;

JAL said that in “;fervently”; trying to reduce cost within the company, it implemented cost-cutting measures that were originally planned to start at the beginning of this new fiscal year.

The airline is expected to release its final earnings results later this month.