JAL wins backing from workers for pension cuts
TOKYO: Japan Airlines said Tuesday that it had won vital backing from its workers to slash their pensions, as Tokyo signalled that bankruptcy was a possibility for the debt-ridden carrier.
About 10,700 of JAL's 16,000 workers have agreed to reductions in their corporate pensions, more than the 66 percent legally required for such a move, a spokesman for the airline said.
However, only about 3,000 of JAL's 9,000 retirees had accepted cuts in their pension payments as of Monday evening, he said, adding: "We are continuing to try our best to gain their understanding."
JAL's huge pension obligations are seen as a major reason for its financial troubles, which were aggravated by the global recession.
Transport minister Seiji Maehara indicated Tuesday that bankruptcy proceedings were still an option for the money-losing airline, saying the priority was to keep it flying.
"Specific measures are more important than the form" of JAL's restructuring, he told a press conference.
The focus should be on "how JAL can be revived as it continues its flight services," he added.
JAL's private lenders favour out-of-court restructuring, fearing legal bankruptcy would damage the airline's reputation and make it harder for them to recoup their investments.
JAL shares closed up 2.27 percent at 90 yen, extending a rebound seen after the government pledged over the weekend to expand an emergency credit line to the airline.
The stock had surged 31.3 percent on Monday, after a plunge of almost 24 percent on the last trading day of 2009.
Battered by the global recession, the carrier is seeking its fourth government bailout since 2001.
The airline, which lost about 1.5 billion dollars in the six months to September, has said it plans thousands of job cuts and a drastic reduction in routes as part of its efforts to return to profitability.
JAL will receive fewer flight slots than its smaller rival All Nippon Airways for a new runway at Haneda Airport, Tokyo's busiest air hub which serves mainly domestic routes, a report said Tuesday.
The government has traditionally given equal treatment to the two major carriers, but judged that JAL could not cope with a sharp increase in flights given its deep financial troubles, the Nikkei business daily said.
Officials at the transport ministry, JAL and ANA declined to comment.