Source: Bloomberg News Author: Chris Cooper 06/12/2009
Subject Concerned: Opinion Airlines Human Resource
Japan Airlines Corp., Asia's largest airline by sales, is extending unpaid leave to cabin attendants and other staff until September as the biggest drop in overseas travel since 2003 pushes it to a second straight annual loss.
The airline granted unpaid leave to about 55 employees this month and another 100 next month and is accepting applications for August and September, spokeswoman Sze Hunn Yap, said on June 12 in Tokyo. She declined to give a cost-saving estimate.
Japan Airlines, Singapore Airlines Ltd. and Cathay Pacific Airways Ltd. have all offered unpaid leave as tumbling demand leaves them with a surplus of staff. JAL, as Japan Airlines is also known, is targeting 53 billion yen (US$541 million) of cost cuts this fiscal year as it forecasts a loss of 63 billion yen.
"Businesses are still restricting travel and demand is slumping," said Osuke Itazaki, an analyst in Tokyo at Credit Suisse Group. "JAL has no choice but to offer unpaid leave."
The airline had a 7.5 percent drop in international passengers in April. Fliers tumbled 12.4 percent in the fiscal year ended in March, the biggest drop since the business year ended in March 2004.
JAL has given unpaid leave to about 925 workers this year, including this month and next. Singapore Airlines, the world's biggest airline by market capitalization, has granted unpaid leave to almost 2,000 staff, according to spokesman Nicholas Ionides.
JAL rose 1.1 percent to 184 yen as of 1:11 p.m. trading on the Tokyo Stock Exchange on June 12. It has fallen 21 percent in the past year.