JAL announces additional downsizing

JAL-Japan Airlines (Tokyo-Haneda) has announced additional details of its downsizing as it attempts to cut costs.

Here is a summary:

JAL will:
1. Cut 6,800 employees by FY2011 (14 percent of the workforce).
2. Cut pension payments and employee salaries.
3. Cut 50 routes (21 international, 29 domestic) by FY2011.
4. Cut all unprofitable domestic routes except for the isolated islands.
5. Decide between Delta/Air France-KLM (SkyTeam) and American (Oneworld) by mid-October.

JAL will no longer fly to:
International:  Milan, Mexico City, Rome, Sao Paulo, etc.
Japan – Kobe, Shizuoka (just opened this year), etc.

JAL has already cut all flights to Europe from Osaka (Kansai) and a new round of cuts for China and Southeast Asia flights is coming soon.

10 Boeing 747-400s are likely to be parked.

Analysts in Japan believe that JAL needs to raise approximately $2.5 billion (U.S.) by the end of the year to stay in business.  Delta appears to have the advantage (so far) in the negotiations.  However, critics and conservatives within JAL note that switching from Oneworld to SkyTeam would mean increased costs, since they already share common systems with the Oneworld carriers.  If they team up with Delta and Air France/KLM, everything will have to be rebuilt.  Stay tuned.

The month of October has been set as the deadline for decision, since a Japan/United States open skies agreement is likely to be reached by the end of the year.