Japan Airlines submits reorganization plan

By Howard Dicus - bio | email

TOKYO (HawaiiNewsNow) – Japan Airlines plans to cut 10 more international routes and return more than 100 planes, but further Hawaii service cuts are not expected.

The largest Asian airline by revenue, JAL has been operating in bankruptcy since January. It has already downsized substantially. The new plans are contained in a reorganization plan submitted.

JAL notified Big Island officials last week that it would stick to its plan to end flights to Kona, but the rest of JAL's service to Hawaii operates fairly full and is unlikely to be affected by the next round of downsizing.

The reorganization plan seeks forgiveness of much of its $11 billion in debt, in return for cutting payroll, already below 50,000, to about 33,000, mostly through retirements and the spinoff of non-core subsidiaries.

JAL has several flights a day from Japan to Hawaii. Its competitors in the corridor include All-Nippon Airways, United Airlines, Delta Air Lines (former Northwest routes), and, in November, Hawaiian Airlines.

Airline industry analysts think JAL downsizing, which will include cutting back several domestic routes within Japan, provides an opportunity for ANA, which might add routes or simply raise fares as fewer choices are offered.

JAL plans not only to reduce flights but also to reduce deals, eliminating, among other things, a longtime policy of giving cut rates to people who flew on their birthday.

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