January 20, 2010
Japan Airlines Corp. plans to cut 31 routes, 53 planes and almost a third of its workforce after winning state funds to help restructure following the nation’s fourth-largest bankruptcy.
Asia’s biggest carrier will ax 14 international routes and 17 domestic ones by the end of March 2013 under a 900 billion yen ($10 billion) plan announced yesterday by Enterprise Turnaround Initiative Corp. of Japan, the state- affiliated fund leading the reorganization. Employment will drop by about 15,700 to 36,201 over the same period.
The cuts may help JAL make an operating profit in the year ending March 2012, compared with an expected operating loss of 265.1 billion yen this fiscal year, according to the plan. The airline, founded in 1951, and two units applied for protection from creditors yesterday, with 2.32 trillion yen in liabilities.
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“There will be big hurdles for Japan Airlines before it’s really revived,” said Yoshihiro Okumura, a general manager at Chiba-gin Asset Management Co. in Tokyo. “It will probably take time for the airline to get back to where it was.”
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