Japan Airlines chief vows to keep international services+

TOKYO, March 17 Kyodo -
Japan Airlines Corp. Chairman Kazuo Inamori vowed Wednesday to turn around the
carrier while maintaining its international routes, defying some calls from
within the government and financial institutions to withdraw completely from
the loss-making operations.
In a joint press conference in Tokyo, JAL President Masaru Onishi also said the
company will likely forgo hiring of new employees for spring 2011 as it
undergoes a state-led rehabilitation process, funded partially with public
funds.
''I think it will be more than possible to achieve profitability on
international routes'' through an overhaul of unprofitable routes and
downsizing of aircraft, said Inamori, also the founder and honorary chairman of
Kyocera Corp.
''JAL does not exist if it withdraws from international routes,'' he said,
adding he would not take on the job if the company's reconstruction entails
such an exit.
But under a rehabilitation process supervised and sponsored by the state-backed
Enterprise Turnaround Initiative Corp. of Japan, JAL is tasked with drastically
shrinking its operations after it filed for bankruptcy protection in January.
Onishi said the company will radically review both the domestic and
international routes after autumn as it irons out details on a rehabilitation
plan it is considering submitting to the Tokyo District Court by the end of
June.
The new management team, headed by Inamori from February, has said it aims to
bring the airline back to profitability on a monthly basis by autumn.
''Unless we are back into the black by around that time, we will not be able to
receive financing in the future, not only from the government but also from our
mega-banks (that have traditionally supported us),'' Inamori said. ''We need to
carry out major restructuring including massive downsizing of costs.''
The carrier booked a group net loss of 177.98 billion yen in the April to
December period due to sagging demand particularly among business travelers.
As part of its restructuring efforts funded by public money, JAL said it plans
to cut monthly wages by 5 percent and forgo bonus payments for its group
employees, with a target of cutting more than 30 billion yen in costs.
The company is also soliciting application for early retirement that includes
even its long-protected pilots, to eventually slash around 15,700 jobs, or
about 30 percent of its group workforce, by the business year through March
2013.
On Wednesday, JAL also obtained government approval for its proposal to cut
pension benefits by more than 30 percent for retirees and around 53 percent for
current employees. The pension reduction is expected to be implemented from
around autumn on the premise that JAL's rehabilitation plan is given court
approval.
As for its hiring plan for spring 2011, it will be the first time for JAL to
forgo recruitment of new graduates since its integration with Japan Air System
Co. in 2002.
''JAL is currently incurring losses on a daily basis,'' Inamori said. ''We need
to stop the bleeding as fast as possible.''
==Kyodo