JAL pilots may become wage earners

October 6th, 2010 by Philip Brasor & Masako Tsubuku

Hey, Delta pilots! How much do you make?

Hey, Delta pilots! How much do you make?

Under the Corporate Rehabilitation Law, financially nackered Japan Air Lines submitted its restructuring plan for 2010 to the Tokyo District Court last month. The plan pledged to cut some 16,000 employees within the whole corporate group. Reduction of about 10,000 jobs is already assured because a certain number of employees are slated to retire naturally and about 3,800 took optional early retirement. The remainder will transfer to subsidiaries outside the group. JAL has reportedly asked more employees to take early retirement, but not enough have come forward to accept the offer, which expires October 22. If they don’t, it means JAL may not be able to reach its 2010 goal.

Consequently, the airline is thinking of threatening workers with seiri kaiko, or “forced resignations” if not enough people take voluntary early retirement. Benefits are understandably worse for those thrown out of the company than for those who leave of their own “free will,” if you can call it that. The unions are, naturally, resisting this strong arm tactic.

Actually, much depends on which employees retire. If pilots take the bait, JAL can save even more money since their pay is higher than any other employees’. Another facet of JAL’s rehabilitation plan is to retire its larger airplanes, so it will not need as many pilots. Last summer JAL offered early retirement to its pilots over the age of 35 and trainees of any age. Reportedly only 160 took the offer.

Which isn’t surprising. JAL pays pilots more than any other company in Japan except ANA, and a lot more than almost any other carrier in the world, for that matter. The average salary for a JAL captain in 2008 was ¥18 million a year regardless of how many real hours he spent in the air (the standard is 65 hours a month). The new pay system would do away with this guarantee, effectively making pilot pay dependent on hours flown, which has increasingly become an industry norm. In real terms it will mean that JAL pilot pay will drop 20 to 30 percent to about ¥12 million a year, which is what the average pilot in Japan makes.

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2 Responses

  1. A way to encourage those eligible for retirement to take the voluntary retirement is to offer them an
    additional retirement bonus for a certain amount determined on an annual salary formula(example, average of highest 3 years of earnings), the number of years of service, and a percentage factor.

  2. I’d really prefer my pilots to be well paid. In the US, some junior pilots are making in the low $20,000s and sleeping on couches at the airport. Veterans are sleeping in campers in the airport parking lot. I want mine to get a nice, quiet rest in a comfortable hotel and not stay up all night playing pachinko or mahjong so he (almost 100% of pilots in Japan are men) can trade his winnings for lunch money. I want intense competition for prestigious, highly paid pilot slots so only the most capable get the job.

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