Japan Airlines considers slashing 10% of workforce in 3 years

TOKYO —

Japan Airlines Corp is considering cutting about 5,000 employees, or around 10% of its group workforce, in three years to March 2012 through attrition and other steps such as encouraging early retirement, industry sources said Monday. The move would help the airline, which has been restructuring under state supervision, to reduce costs by more than 150 billion yen, the sources said.

JAL has included the plan in its management improvement program that the company hopes to compile and make public by the end of September in response to a request from the Land, Infrastructure, Transport and Tourism Ministry for it to draw up a drastic restructuring program, they said. The airline has begun consultations with lenders on its personnel reduction plan with a view to securing additional funding from them by indicating it will implement large-scale corporate downsizing, the sources said.

The plan, however, is expected to meet objections from groups such as labor unions.

The JAL group had about 48,900 employees on a consolidated basis as of the end of April.

In addition to attrition and early retirement, JAL plans to encourage the use of its leave of absence system in which employees can temporarily take time away from work without pay for purposes such as studying abroad, the sources said.

The struggling airline is also considering selling minor group companies or realigning them as a way to cut down on the number of total employees in its group, they said.

In its management improvement program, JAL also intends to mention its plan to scrap or reduce numerous international and domestic flights, on top of its announcement earlier this month that it will suspend or cut 10 international routes and reduce domestic flights on six routes.

It will also work on switching to smaller and more fuel-efficient planes, as well as selling its surplus Boeing 747 jumbo jets as part of cost-cutting efforts, according to the sources.