January 11, 2010
Japan Airlines is expected to cut about a third of its workforce under a three-year rehabilitation plan.
According to a new report on Monday, the company is also to file for bankruptcy and embark on a government-led turnaround.
The news agency Kyodo News reported that 15,600 jobs would be cut along with employees’ benefits and salaries.
The state-backed Enterprise Turnaround Initiative Corp. (ETIC) plans to decide on its bailout package for Japan Airlines by January 19, the same time the airline is expected to file for bankruptcy protection, Kyodo said.
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The plan would include a fresh investment of $3.3bn (300bn yen) by the ETIC and wipe much of the carrier’s soaring debts under bankruptcy protection.
Japan Airlines has attributed its current financial woes to a sharp drop in business passengers on international flights, triggered by the global financial crisis.
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