JAL to cut 10 per cent workforce

As part of its cost cutting initiative, Japan Airlines is considering paring its workforce by around 10 per cent to reduce costs by $1.6 billion by March 2012.

The cash-strapped airline will cut around 5,000 jobs in three years through attrition and early retirement according to Kyodo news agency which quoted undisclosed sources.

The move would help the airline, which is undergoing a restructuring process under state supervision, to slash costs. It has begun consultations with lenders on its plans for reducing personnel which would help obtain additional funding from lenders, the sources said.

However, resistance to the plan from groups such as labour unions cannot be ruled out the report said.

The JAL group had 48,900 employees on its roster as of April. It plans to encourage the use of its leave of absence system under which employees can temporarily take time off from work without pay to pursue studies abroad, early retirement and attrition to effect the cuts, according to sources.

The group reported a heavier-than-expected ¥99.04 billion net loss for the April-June quarter as cost-pruning efforts failed to deliver the intended results to cover the loss of revenue due depressed demand for air travel in the economic downturn and swine flu scare.