JAL pilots may become wage earners
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.