The medium-term restructuring plan announced last week by Japan Airlines Corp. is a plan for the survival of the nation's flag carrier. The group is saddled with 1.7 trillion yen in debt. JAL President and CEO Haruka Nishimatsu summarized the importance of achieving the goals when he said, "We must keep in mind that unless we do this, there will be no more chances for revival." He also stressed that he would step down if the airline fails to pay dividends to shareholders in 2010.
The plan includes cutting 4,300 jobs over three years through early retirement and by attrition, cutting executives' pay by 45 percent to 60 percent, and terminating 10 unprofitable domestic routes starting in April.
The job cuts are expected to reduce personnel costs in the 2009 business year by 50 billion yen from 2006. The plan also calls for continuing a 10-percent cut in base pay begun last April, changing the international flight schedule, introducing more fuel-efficient aircraft and selling some shares in a subsidiary.