Troubled Japan Airlines (JAL) is expected to cut 15,600 jobs, or about 30 percent of the group’s workforce, in three years under a rehabilitation plan, a report said yesterday.
The layoffs, coupled with cuts in benefits and wages, will be carried out together with the sale of JAL’s subsidiaries, including JAL Hotels Co, Kyodo News reported, citing unspecified sources.
The carrier’s work force will be trimmed to about 36,000 by the business year to March 2013, the report said.
The state-backed Enterprise Turnaround Initiative Corp (ETIC) plans to decide on its bailout package for JAL as early as next Tuesday, the same time the airline is expected to file for bankruptcy protection, Kyodo said.
The ETIC estimated the liabilities of Asia’s top carrier exceed its assets by more than ¥860 billion (US$9.5 billion), Kyodo quoted the sources as saying.
It plans to reduce JAL’s liabilities by ¥730 billion through the court-backed bankruptcy, the report said. It will also invest ¥300 billion in JAL so the carrier’s assets would exceed its liabilities by more than ¥160 billion.
Even after the bankruptcy proceedings, the state-backed body will guarantee more than ¥470 billion for payments of fuel and other commercial transactions necessary to keep JAL flying, the report said.
The company’s creditor banks will be required to waive about ¥350 billion, out of an approximate ¥430 billion in unsecured bank loans, Kyodo quoted the sources as saying.
The ETIC estimated that JAL’s consolidated operating loss would expand to about ¥265 billion for the current business year to March, compared with a year-earlier loss of ¥51 billion because of a drop in passenger numbers.
Through restructuring measures under the ETIC’s rehabilitation plan, JAL aims to achieve ¥116 billion in operating profit by the year to March 2013, the sources said.
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