Bangkok--8 Feb--eTurboNews
"Sadly Japan Airline’s new 'Revival Plan' has fallen at the first hurdle, in the critical area of staff reductions, where the plan is strong on adjectives and thin on progress", according to the Executive Chairman of the Centre for Asia Pacific Aviation, Peter Harbison.
A predictably difficult series of negotiations with unions and staff has produced only modest results. A 'bold review of work process' will seek 10% staff productivity increases, a reduction of staff numbers by 8% spread over more than two years, along with an accelerated retirement programme and salary cuts designed to reduce average salary levels and “other large scale personnel cost reduction measures'.
"This should be just enough to upset staff without producing adequate cost savings", stated Mr Harbison.
The modesty of the cost cuts has imposed a need to shift the revenue strategy towards a reliance on higher yields (eg with the introduction of first class domestically and premium economy internationally) — if you can’t cut costs, improve yields. This has some attractions, but it leaves JAL highly exposed to lower cost competitors and to economic downturn. International operations will be progressively passed to the lower cost subsidiaries, JALways and JAL Express, as the average gauge of the mainline carrier is reduced in line with the higher yield target.