Japan Airlines to cut staff costs by $ 413mn

By Staff
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Google Oneindia News

Tokyo, Feb 3: Japan Airlines Corp. (JAL) will cut about 3,000jobs as part of a move to reduce staff costs by some 50 billion yen(3 mln) in fiscal 2009/10 from the current year, a financial dailyreported on Saturday.

The Nikkei said JAL, Asia's biggest airline by revenue but rankedsixth by market value, have presented the mid-term restructuring planto its key lenders and have requested fresh borrowing for this fiscalyear totalling 60 billion yen.

The Development Bank of Japan and Mizuho Corporate Bank are among the banks likely to offer the lending, Nikkei added.

The troubled carrier is set to announce on Tuesday the businessplan, which covers the fiscal year starting April and through fiscal2010 that runs until March 2011, the paper said.

JAL will trim its flight-related workforce of 30,000 or so byaround 3,000, and continue to cut base salary by 10 percent in theupcoming fiscal year from April 1 and beyond, as part of measures to toachieve the planned cuts in personnel costs.

Company officials could not be reached for comment.

The airline's business has been hit by high fuel prices andsluggish demand on its domestic routes following safety mishaps, whichhave led customers to switch to rival All Nippon Airways (ANA).

JAL has forecast a 2006/07 group net profit of 3 billion yen buthas said it would sell assets, including stakes in hotels it runs andits trading house subsidiary Jalux Inc., to realise that target.

It is also expecting a profit boost of more than 25 billion yen from an overhaul of its pension system.

The carrier also aims to slash consolidated interest-bearing debt,which totalled 1.23 trillion yen as of March 31, 2006, to less than 1trillion yen, through the restructuring steps, the Nikkei said.


Reuters>

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