• search


Written by: Staff

TOKYO, March 1 (Reuters) Japan Airlines Corp., which has been locked in managerial infighting, said on Wednesday its president will step down to take responsibility for management turmoil and estimates of hefty losses.

The announcement followed media reports that boosted the airline's share price by nearly 5 per cent on Wednesday.

Asia's biggest airline said Senior Vice President Haruka Nishimatsu, 58, will become president and chief executive in June, replacing Toshiyuki Shinmachi, 63, who will become chairman.

Shinmachi told reporters he decided to resign to take responsibility for his inability to regain trust from passengers on safety issues, the company's sharp downward revision of its earnings estimate, and a delay in resolving the internal conflict.

''I've made up my mind to end the turmoil,'' he said.

The internal strife broke out last month when four board members of the JAL group demanded that Shinmachi and two other top executives leave their posts to take responsibility for the firm's deteriorating financial health and a series of safety mishaps.

Shinmachi said the decision also reflected the fact that more than 400 management-level staff members had signed a petition demanding a top management reshuffle.

Nishimatsu, who has been dealing with financial issues, said he decided to take the helm to avoid further damage.

''I've accepted the task to end this turmoil since the company will face financial problems if the current situation continues,'' he said.

News of the management reshuffle, which was first reported by financial daily Nihon Keizai Shimbun on Wednesday, boosted JAL's shares by 4.8 per cent to 326 yen. The benchmark Nikkei average fell 1.49 per cent.

DOUBTS Hit by high fuel prices and safety mishaps that included a tyre falling off and an engine catching fire, JAL now expects a net loss of 47 billion yen ($406 million) for the year ending this month, against the previous year's 30 billion yen profit.

But analysts were sceptical whether a new chief would be able to quickly turn around the struggling carrier.

''They just solved one of the many problems that they need to solve,'' said Daiwa Institute of Research analyst Hajime Hitotsuyanagi.

Okasan Securities analyst Yoshihisa Miyamoto said the immediate challenge for the new head would be to unify the company, which is set to unveil a midterm business plan for the next five years on Thursday.

Unless he successfully does so, it will be hard to make progress on restructuring, Miyamoto said.

Nishimatsu, who has long experience in dealing with the company's finances, had not taken sides during the in-house conflict, local newspapers had said.

Executive Vice President Katsuo Haneda and Senior Managing Director Hidekazu Nishizuka will also step down in March, JAL said.

($1=115.72 Yen) REUTERS SD DS1620

For Daily Alerts

For Breaking News from Oneindia
Get instant news updates throughout the day.

Notification Settings X
Time Settings
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Oneindia sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Oneindia website. However, you can change your cookie settings at any time. Learn more