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JAL transforms bankruptcy to •186.6 billion profit

Date Posted: 2012-05-25

In only two years, Japanís flagship carrier Japan Airlines has turned itself around, going from bankruptcy to profitability.

JAL has registered a net profit of •186.6 billion for the year, largely due to massive cost cutting on the part of the airline that was battling back despite natural disasters in Japan and record flooding in Thailand, both of which forced flight scheduling cutbacks. JALís 2010 bankruptcy sent Kazuo Inamori, a businessman designated by the government to oversee the airlineís resurrection, into action slashing costs. Inamori motivated employees to understand the requirements to reduce costs and increase profits, all of which led to the airline adding extra flights to Hawaii and fighting for every possible passenger.

It worked, and adding the Boeing 787 Dreamliner to its fleet has drawn increased attention from flyers wanting to contribute to energy efficiency while getting to designations in a timely fashion. JAL had racked up debts of more than •2.32 trillion and sent airline officials cutting routes and firing employees.

In only a year, though, JAL emerged from bankruptcy, and is now predicting profits of •130 billion in this fiscal year. JALís President, Yoshiharu Ueki, says his goals are to ďmake this company attractive for investors and to continue showing good performance while focusing on safety in our operations.Ē JALís ordered ten Boeing Dreamliners to beef up its fleet and reduce fuel expenses. JAL says itís goal is to cut costs •50 billion during the coming five-year period.

Competitor and domestic rival All Nippon Airways has reported record profits of $1.2 billion in the financial year ending March 31st. The two Japanese giants have long dominated the Asian market, but are being challenged by low-cost carriers now operating from both Japan and South Korea.

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