TOKYO (Dow Jones)--The chairman of Japan Airlines Corp. said Wednesday he aims to return the carrier to profitability on a monthly basis from early autumn, and to keep international passenger services.
Kazuo Inamori said intends to do this regardless of economic conditions, as doing so is crucial to securing funds from financial institutions down the road.
"We have to proceed with drastic restructuring, including cost cutbacks," Inamori told reporters. But at the same time, "JAL without international passenger services is absolutely not something that is on my mind," as revenue from such services is the biggest component of its business.
Inamori made the comments as the nation's biggest airline by revenue--which filed for bankruptcy protection in January--attempts to turn itself around with the help of the quasi-governmental Enterprise Turnaround Initiative Corp. of Japan. But current conditions don't suggest optimism for the once proud airline, whose disastrous financial situation forced it seek the government-backed bailout.
"We are bleeding a loss every day," said Inamori, 78, a widely respected management guru who built a start-up company into the blue chip electronics component maker Kyocera Corp.
Many JAL employees lack any sense of business, and the company has "too few people who base management on profits and losses," said Inamori, who took JAL's helm Feb. 1.
In February, the airline reported a Y46.7 billion net loss in the fiscal third quarter ended December, worse than the Y38.5 billion net loss in the same period a year earlier.
JAL's president Masaru Onishi said the airline is assembling a plan to scale back flight routes and frequencies, and the resulting cost reductions should be in effect from early autumn. JAL has already taken steps to cut goods procurement costs, among other things, he said.
The carrier has received government financial support for its operations during restructuring, which will involve reducing the 47,000-strong workforce reduced by a third, cutting unprofitable routes and lightening the debt load.
-By Hiroyuki Kachi, Dow Jones Newswires; 813-6269-2789; Hiroyuki.Kachi@dowjones.com
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