Japan Airlines to speed up job cuts

TOKYO: Japan Airlines said Friday that it would cut 4,300 jobs earlier than announced in February to speed up the company's revival and reduce costs.

"We now want to carry that out sooner," a JAL spokesman, Soichi Yatsugi, said. "We don't have a specific target at this point, but we would like to move it forward by a year. We want to accelerate our restructuring measures."

The move suggests JAL is feeling greater urgency to refocus its business. The job-reduction plan will help it trim labor costs by ¥50 billion, or $406.5 million, a year, important savings for a company struggling under heavy fuel costs.

The No. 1 Japanese carrier originally announced the job cuts in February. The reductions, which represent about 8 percent of its work force, would come by the end of its 2009 fiscal year, the company said at the time.

JAL is not only suffering from high fuel prices, but also stiff competition from All Nippon Airways. JAL posted a group net loss for a second straight year in the year ended March 31.

Analysts say JAL needs funds to renew its fleet with more fuel-efficient airplanes to improve its bottom line. The company is already laboring under a debt of ¥1.7 trillion, $13.8 billion, 75 times operating profit last year.

"They have to do this if they want to get additional loans from their lenders," said Osuke Itazaki, a Credit Suisse analyst in Tokyo. "They need to buy new planes and refurbish their cabins to increase their competitiveness."

The company has already removed 1,200 employees from its books after it sold a stake in Jalux, an airport retailer, this year.

Bloomberg News, The Associated Press
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