Japan Airlines today announced changes to the Japan Airlines board of directors, together with plans for additional corporate structural changes in the JAL Group to improve efficiency and profitability. Both are subject to shareholder approval at the company's annual general meeting on June 27.
Also, in cooperation with Japan Air System, JAL announced the proposed board of directors and senior executives of Japan Airlines System, a new holding company to be established on October 2 to oversee the planned integration of JAL and JAS, scheduled to be completed by Spring 2004.
I. JAL Corporate Structure
changes
To strengthen the JAL Group management system the whole group has already been divided according to business segment and functions. The point of this has been to clarify responsibility and the authority of each segment and to speed up decision-making.
Changes will now be made in the areas of activity and scope of three of the four key committees under the direction of the CEO.
The corporate safety committee, which used to be a separate organization, will now function as a committee, focusing on operating related risk management. Other business risk management not related to operations will be passed to the business activities reappraisal committee. The customer satisfaction committee will incorporate the study of new customer services, in addition to its established function as a service quality control system. There are no changes in the scope of the Environmental committee.
II. Management Strategy
1. In future JAL Group management strategy will be emphasized on seven key segments. These are: corporate business planning, finance and purchasing, human resource development, associated businesses, policy management, compliance and jointly, safety and the environment.
(1) To strengthen the function of group business strategy, JAL is establishing a new corporate business-planning department. This will cover business planning and investment as well as supervising the financial situation of each business segment. This activity will be supported by the increasing applications of e-business within the organization.
(2) The group compliance department is a new fixture, with the main function of incorporating legal affairs and business activities monitoring.
2. General Administration
The use of shared service centers within the group for group company use is being expanded to eight centers. These include already established accounting and financing centers and from now revenue management, purchasing, IT, employee health monitoring, general administration and human resources management.
III. PASSENGER BUSINESS OPERATION CHANGES
The major new development in passenger business is the operation as in-house companies of the international and domestic passenger divisions, each to be regarded as a profit-center under a company president. JAL feels this will define responsibilities, focus the lines of authority more clearly, and help maximize profits. Marketing strategies will be strengthened group-wide
1. In-house international passenger company
(1) The in-house international passenger operating company, under a company president, will have a business planning vice president responsible for planning and revenue management. The company will also handle international alliance issues and a new section will be expanded solely for the development of business in the China market. The company will also include a marketing planning office for product development and strategy.
The international passenger company will share with the new domestic passenger company the in-house sales support functions of customer satisfaction handling, ticketing procedures and planning, passenger IT systems and cabin service planning.
(2) The international company will include an international industry relations team under the direct supervision of the president, to reinforce international industry relations.
(3) Sales promotion and advertising services and frequent flyer promotion through the JAL Mileage Bank will be shared with the domestic passenger company, although the international company will have its own, separate sales structure.
2. In-house domestic passenger sales company
(1) This will have a similar structure to the international company, responsible for its own marketing, planning, revenue management and sales, yet sharing certain in-house sales support functions, such as advertising, FFP and customer satisfaction.
JAL has already established an in-house cargo company. |
