ID :
102543
Tue, 01/26/2010 - 00:59
Auther :
Shortlink :
https://www.oananews.org//node/102543
The shortlink copeid
Gov't intervention in JAL to leave stain on Japanese history: Takenaka
+
TOKYO, Jan. 25 Kyodo -
The government policy to intervene in the affairs of debt-ridden Japan Airlines
Corp. will ''leave a stain on Japanese history'' and would risk crippling the
nation's aviation industry, former economic and fiscal policy minister Heizo
Takenaka said.
In a recent interview with Kyodo News, the key architect of former Prime
Minister Junichiro Koizumi's economic and postal reforms suggested Japan should
concentrate on creating a single powerful ''megacarrier'' with rival All Nippon
Airways Co. to survive intensifying global competition.
''The only way to justify the government intervention in JAL would be if the
opportunity is used to beef up the industry as a whole,'' Takenaka, currently a
professor at Keio University, said in the interview.
The comments came after Japan's top airline and its two principal subsidiaries
filed for bankruptcy protection last week with combined liabilities totaling
over 2 trillion yen, setting off a government-led rehabilitation process funded
by massive public funds.
Takenaka warned the ruling Democratic Party of Japan will suffer ''a massive
failure'' if they wipe out the losses from JAL's balance sheet without drastic
restructuring, which could hamper market competition through price-dumping by
JAL.
''JAL should restructure 90 percent of its international routes and survive as
a domestic low-cost carrier, while ANA should manage the international
routes,'' said Takenaka, who was a Cabinet member of a previous Liberal
Democratic Party-led government.
''That would, in fact, be an industrial policy to create a megacarrier in
Japan,'' he added.
Under the current rehabilitation plan crafted by a state-backed turnaround
body, JAL is expected to halve the number of its subsidiaries, cut 30 percent
of its group workforce, and scrap 31 unprofitable domestic and international
routes.
Experts have often called for rethinking Japan's current aviation market setup
where two major carriers -- JAL and ANA -- dominate. They say only either of
the two would be able to survive as a flood of airlines across the globe target
the expanding Asian market.
Even transport minister Seiji Maehara recently said, ''We need to carefully
assess the need as to whether two carriers can exist as megacarriers.''
Takenaka added the ''too big to fail'' logic, which was applied to bail out
U.S. auto giant General Motors Corp., would not work for JAL since GM had over
250,000 employees while JAL alone only has about 23,000 employees, which is
comparable to other Japanese companies.
''Can we really use taxpayer money for this?'' he asked. ''Before we even talk
about rescuing JAL, government intervention in itself is wrong.''
==Kyodo
2010-01-25 23:08:59
TOKYO, Jan. 25 Kyodo -
The government policy to intervene in the affairs of debt-ridden Japan Airlines
Corp. will ''leave a stain on Japanese history'' and would risk crippling the
nation's aviation industry, former economic and fiscal policy minister Heizo
Takenaka said.
In a recent interview with Kyodo News, the key architect of former Prime
Minister Junichiro Koizumi's economic and postal reforms suggested Japan should
concentrate on creating a single powerful ''megacarrier'' with rival All Nippon
Airways Co. to survive intensifying global competition.
''The only way to justify the government intervention in JAL would be if the
opportunity is used to beef up the industry as a whole,'' Takenaka, currently a
professor at Keio University, said in the interview.
The comments came after Japan's top airline and its two principal subsidiaries
filed for bankruptcy protection last week with combined liabilities totaling
over 2 trillion yen, setting off a government-led rehabilitation process funded
by massive public funds.
Takenaka warned the ruling Democratic Party of Japan will suffer ''a massive
failure'' if they wipe out the losses from JAL's balance sheet without drastic
restructuring, which could hamper market competition through price-dumping by
JAL.
''JAL should restructure 90 percent of its international routes and survive as
a domestic low-cost carrier, while ANA should manage the international
routes,'' said Takenaka, who was a Cabinet member of a previous Liberal
Democratic Party-led government.
''That would, in fact, be an industrial policy to create a megacarrier in
Japan,'' he added.
Under the current rehabilitation plan crafted by a state-backed turnaround
body, JAL is expected to halve the number of its subsidiaries, cut 30 percent
of its group workforce, and scrap 31 unprofitable domestic and international
routes.
Experts have often called for rethinking Japan's current aviation market setup
where two major carriers -- JAL and ANA -- dominate. They say only either of
the two would be able to survive as a flood of airlines across the globe target
the expanding Asian market.
Even transport minister Seiji Maehara recently said, ''We need to carefully
assess the need as to whether two carriers can exist as megacarriers.''
Takenaka added the ''too big to fail'' logic, which was applied to bail out
U.S. auto giant General Motors Corp., would not work for JAL since GM had over
250,000 employees while JAL alone only has about 23,000 employees, which is
comparable to other Japanese companies.
''Can we really use taxpayer money for this?'' he asked. ''Before we even talk
about rescuing JAL, government intervention in itself is wrong.''
==Kyodo
2010-01-25 23:08:59
