Yen for Living

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.

Continue reading about JAL's restructuring

Let's share

This ticket shop will pay more than twice as much for an ANA stockholder coupon as for a JAL coupon

The crisis at Japan Airlines has indirectly introduced a lot of people to the fairly common practice of kabunushi yutai, meaning “privileges for stockholders.” The practice seems to be unique to Japanese corporations, which give special treatment to shareholders when there are no dividends to distribute. If the company is a manufacturer, it may actually give away its products or discounts on its products. In the case of JAL, shareholders received coupons that could be used for discounts of up to 50 percent on air fares, tours, hotels and other JAL-related services.

In the past couple of weeks these stockholder coupons have become a hot commodity. Because they are given away to stockholders and, according to the government entity that is overseeing JAL’s rehabilitation, coupons “so far issued” will be honored, their sale value has gone up a bit at so-called ticket shops.

Ticket shops are those retail businesses that resell travel tickets, gift coupons, postage, or anything that has a face value. Usually, people who receive such coupons and tickets for free (either as gifts or premiums or even as part of their job) sell them to ticket shops at below their face value, and then the ticket shops resell them at a price just a bit below face value. It’s perfectly legal.

JAL shareholders seem to have a lot of these coupons since JAL hasn’t had too many profitable years since it went private in the 1980s, and so they have always sold these coupons to ticket shops. But until the media started paying attention to the possibility that the company would go bankrupt the average person didn’t know about them. According to one news show I saw, due to increased demand the average price of a single coupon has risen from about 2,500 yen to 3,300 yen in about a week’s time. Ticket shops tend to pay a little more than 1,000 yen to buy them now. It used to be about 2,000 yen, but it dropped when JAL’s share prices did.

If a lot of people suddenly use these coupons – and JAL will have to honor them – then it will be bad news for the airline, since they need all the money they can get. They can hardly afford to give 50 percent discounts to hordes of travelers.

Let's share

Spend ‘em while you can.

If new transport minister Seiji Maehara has anything to say about it, Japan Airlines will not go bankrupt, but that doesn’t necessarily mean the country’s flaship carrier is out of the woods or won’t someday merge with some other airline. Because of all the panicky speculation, no one had brought up the touchy subject of all those frequent flyer miles that JAL customers have socked away.

Is it possible they could be rendered useless? There are precedents. When it was liquidated in 2002 Australia’s Ansett Airlines suspended its frequent flyer program and since no other airline came in to pick them up, all points that were accumulated completely lost their value.

In a recent article, Shukan Post offered some advice for JAL Mileage Bank members. For one thing, if you’re planning an overseas trip any time in the near or even distant future, book it now and use your miles, since you’re more likely to get the best value for them. You’re allowed to book up to 330 days in advance for an international flight, and though you can change the date up to a day before you leave, you can’t change the route.

Continue reading about JAL miles →

Let's share