ASIA Travel

JAL Constructing New Medium Term Corporate Plan

Search ASIA Travel Tips .com Latest Travel News Send to Friend Monday, 22 June 2009

The JAL Group is in the process of constructing a medium term corporate plan that will see drastic reformation to its business model and processes, from the period starting FY2009 and onwards.

 While it is due to be completed and announced later this year, the basic course of actions under this plan has been outlined at the request of the Japanese Ministry of Land, Infrastructure, Transport and Tourism (MLIT).

The fundamental objective of this corporate plan is to develop a business model that does not overly rely on the recovery in the economy, but instead, to look within the company and implement sweeping cost cuts across the group wherever possible.

Current Measures

- Domestic Passengers - In the course of restructuring the network, a total of 23 underperforming routes were suspended and the flight frequencies on 11 other routes were reduced in the fiscal years of 2007 and 2008.

The domestic network for FY2009 will see an additional 7 routes discontinued and the flight frequency of 1 route reduced. As an overall result of this capacity cut for the 3 fiscal years, the size of the group's domestic fleet will be reduced by 9 aircraft by the end of FY2009.

- International Passenger - On the international network, 6 unprofitable routes were suspended and 3 routes saw cuts in frequency in FY2007 and FY2008. As for FY2009, operations on another route will be ceased and the flight frequency on 2 routes reduced.

- Cargo - The group's cargo business model is undergoing a radical make-over with plans that include establishing more strategic partnerships with external companies in order to condense the risks faced by cargo operations in this economic climate.

- Cost Reductions - In the fiscal year 2008, JAL achieved a 50 billion yen cost reduction through a variety of measures such as the temporary decrement in annual bonuses, improved personnel productivity, and adjustments to the wage system which alone led to a 5 billion yen saving. The group estimates an overall cost savings of 10 billion yen can be reached in FY2009 from the continuation of these measures.

Also contributing to the cost reduction achieved, the early retirement scheme in FY2007 and FY2008 shrank the workforce by a total of 5,574 persons, from 53,100 employees at the end of FY2006, to 47,526 employees at the end of FY2008 and thereby decreasing labour cost.

Plans for FY2009 include adjustments to the pension scheme which will bring about another 88 billion yen in cost reductions. In addition, a special early retirement scheme will be implemented and each department is to re-look at their business processes to sift out more ways to lessen costs.

Measures to be Implemented

Aircraft in the group fleet used for international and domestic routes are progressively undergoing downsizing and renewal, and the overall fleet size will be reduced as JAL continues the switch to smaller, more fuel-efficient aircraft. More emphasis will be placed on routes with higher profitability and the airline has said it will pursue drastic cost cuts "fervently".

- Domestic Passengers - The domestic network is being reassessed and revised based on more conservative projection of demands and profitability. The airline has said it does not discount the possibility of discontinuing more under-performing routes. In addition, JAL plans to operate more regional jets on domestic routes and re-evaluate the management structure of subsidiary airlines of the JAL Group, where it will look for further areas for cost cuts.

- International Passenger - The international network is also being reassessed and revised. Furthermore, higher efficiency, state-of-the-art aircraft are progressively replacing older, bigger aircraft in the fleet to cut fuel consumption and cost.

- Cargo - The group's cargo business model will continue to undergo drastic changes which include establishing more strategic relationships with external companies.

- Cost Reductions - In addition to changes in the pension system and the implementation of the special early retirement scheme, cost cutting measures will also converge on departments such as maintenance, flight operations, cabin crew, airport operations, sales and other backend operations.

JAL's fiscal year 2009 is April 1, 2009 to March 31, 2010.

See other recent news regarding: Airlines, Aviation, Flights, First Class, Business Class, GDS, Miles, Hotels, Promotions, New Hotels, Visitor Arrivals, Cruises, Free Deals, JAL, Japan

Subscribe to our Latest Travel News Daily Email Free of Charge by simply entering your email address to the right. You can also stay updated with our RSS Feed Free Travel News RSS Feed and even add the travel news to your website. Have questions? Please read our travel news FAQ.
Exclusive HD video interview with Mr. Fumihiro Sakakibara, General Manager - Japan, Macao Government Tourism Office. Aviation industry update from the Group CEO of AirAsia, Mr. Tony Fernandes, and Gary Chapman, Emirates' President Group Services and dnata. Exclusive HD video interview with Mr. John R. Rolfs, General Manager of The Ritz-Carlton, Tokyo and Vice President Japan & Korea. In this interview, filmed in a luxurious suite at The Ritz-Carlton, Tokyo on Sunday, 24 September 2017, we ask Mr. Rolfs to tell us more about the property.
Macao Tourism Update Aviation: AirAsia and Emirates The Ritz-Carlton, Tokyo
What exactly is going to happen to The Dusit Thani Bangkok hotel, when will it close, what about the staff, when will the new Dusit Thani Bangkok open and what will it be like? In this exclusive HD video interview with Ms. Sukanya Janchoo, General Manager of The Dusit Thani Bangkok, Steven Howard of asks Khun Sukanya about the hotel, its markets, RevPAR and these major changes. Travelodge Hotels Asia’s Brands and Expansion Plans - Exclusive HD Video Interview with Stephen Burt, Chairman. Exclusive HD video interview with Alejandro Bernabe, Group Director of Avani Hotels and Resorts. We talk about Avani Hotels' future plans and what exciting new developments are in the pipeline. You will also learn that Avani is about to announce a new sub brand, is currently building its first resort with private pool villas and what the group's position is on new technology.
Dusit Thani Bangkok Travelodge Hotels Asia Avani Hotels & Resorts
Jonathan Wigley, CEO of Travelodge Thailand, outlines expansion plans in HD Video Interview. Exclusive HD video interview with Myanmar's Minister of Tourism and Hotels, H.E. U Ohn Maung, about the status of tourism in the beautiful and mystical country of Myanmar (formerly known as Burma). Birth of a Luxury Thai Hotel Brand - HD Video Interview with Christopher E. Stafford, Chief Operating Officer of the newly formed 137 Pillars Hotels & Resorts.
CEO of Travelodge Thailand Myanmar Tourism Update Birth of Luxury Thai Hotel Brand
This HD video tour of Thai AirAsia X's brand new 337-seat Airbus A330-300 aircraft was filmed at Don Mueang Airport in Bangkok, Thailand on 14 May 2014  Exclusive HD video interview with Jaime J. Bautista, President & Chief Operating Officer (COO) of Philippine Airlines (PAL) HD video of the interior and exterior of a Thai Vietjet Airbus A320-200.
Thai AirAsia X A330-300 PAL President & COO Thai Vietjet A320-200
Inside Qatar Airways Boeing 787-8 Dreamliner - HD Video It takes 800 workers between 65 and 80 days to assemble, install, test, paint, furnish and deliver an Emirates Airbus A380. Showers, Bars, Lounge - The Emirates Airbus A380 Has Them All - HD Video Tour Thai Airways International Takes Delivery of Brand New Boeing 777-300ER
Qatar Airways B787 Emirates A380 Thai Airways B777-300ER
Latest Travel News
Copyright © 1997-2017