All Nippon Airways just announced a new hiring policy for cabin attendants (CA). Starting next year, new CAs will be full-time regular employees of the company. Since 1995, CAs at the company were hired as contract workers who could opt to become regular employees after three years. The reason for the change is tougher competition from low-cost carriers (LCCs). ANA says in order to ensure the best service for their patrons they want to offer flight attendants better employment security. Currently, ANA employs about 6,000 CAs, 1,600 of which are contract workers. Next year, if these 1,600 want to become regular employees they can. The company plans to hire 450 new CAs in 2014.

The contract system was adopted by both ANA and Japan Airlines (JAL) in the same year, when the bubble economy had ended and Japan was entering its long period of sluggish growth. The object was to keep personnel costs in check. JAL says it has no intention of abandoning its contract work system "for the time being." Twenty percent of its 3,800 Japanese CAs are contract workers. LCCs Peach and Jetstar only hire CAs as contract workers, while Skymark offers its contract CAs regular employment after one year. Though ANA's policy change means its personnel costs will rise, the company thinks it can offset these expenses with reduced training costs.

Presently, when an ANA CA's contract expires, she is offered full-time employment, but she can also opt for another 3-year contract. Over the years, 80 percent of ANA's CAs chose regular employment. Contract workers are paid by the hour, and during the initial training period the wage is less than ¥1,000. That goes up to about ¥1,200 an hour until the end of the contract. JAL pays even less, about ¥1,100. Typically, a cabin attendant earns about ¥2 million a year while she is a contract worker, which isn't much but CAs, even contractors, have some perks, like access to inexpensive company housing. However, the difference between contract workers and regular workers is striking. In 2001, the average yearly pay for CAs in Japan was ¥6.79 million, reflecting the fact that their ranks were still dominated by full-time regular employees. By 2011 the average salary had dropped to ¥3.85 million, reflecting the dominance of contract workers and newer regular employees rather than veterans who make more due to seniority. Last year it was about ¥4.8 million.