According to Japan Airlines Corp (JAL), it will retire two-fifths of its aircraft, abandon one in eight overseas flights and end a quarter of its home routes in a bid to return to profit. To compete against cheaper regional rivals, JAL also said it would look at creating a low-cost carrier. The state-backed turnaround body leading the restructuring said relisting the airline would be possible by 2013.
JAL’s turnaround pledge includes a halt to 10 international flights following earlier closures aimed at stemming losses. It will also stop plying 39 domestic routes.
“JAL’s flop has caused a lot of trouble to shareholders and financial institutions,” said Chairman and Chief Executive Kazuo Inamori at a news conference in Tokyo. “Today is a new start for us,” said Inamori, who was asked by the government to run JAL for three years after it filed for bankruptcy.
Brought down by years of high costs, the former state carrier still faces an uncertain future as it takes on other carriers in a burgeoning and increasingly competitive regional air market.
Inamori’s fleet changes which amount to the elimination of 103 aircraft, was uploaded by aviation analysts.
JAL will offload all its Boeing 747-400 jumbos and every Airbus A300-600 jet it owns by March next year, and will stop operating all its McDonnell Douglas-built MD81 and MD90 aircraft by a later date. When complete, JAL will use four models rather than the seven it flies now.
“This is a massive shutdown in a very short amount of time, and generally only happens when airlines are shut down, not when they restructure,” said Shashank Nigam, head of Singapore-based airline industry consultant SimpliFlying Pte. “We are likely to see a very much smaller and more regional Japan Airlines come out of this,” he said.