Japan Airlines, or JAL, the largest airline by revenue in Asia, unable to withstand the financial burden. Unorganized management for many years, operational costs continue to rise, and pension costs are strangling the neck is not matched by an increasingly eroded revenue. Tough competition and the drop in passengers suffering JAL adds.
JAL eventually declared bankruptcy and asked for legal protection in order not required creditors to auction off assets cheaply with the risk of not having the opportunity to restructure.
JAL has 25 billion dollars in debt and is the largest bankruptcy in corporate history outside the Japanese financial companies.
Why go broke? JAL was not taken care of properly. Under the auspices of the government and the service to the community, JAL also have to serve the routes that are not profitable.
JAL also complacent with the support and status as Japan’s flag carrier. This makes them less notice JAL financial performance. His debts little by little into the hills. On the other hand, shrinking their assets. Long market value equal only to the small airlines of Croatia.
Greater government support of JAL, especially financial aid, making the nearest competitor irate JAL, Nippon Airlines (ANA), which assess aid to JAL JAL unfair and should follow the market and face competition.
The Yomiuri Shimbun newspaper reported 151 domestic routes JAL only filled less than 50 percent of passengers. Only 11 of 99 JAL flights are filled more than 70 percent of passengers. The high cost of treatment at the airport and also reduced the income of JAL, which is already in a position greater than the pole pins.
Starting the 1960s, the Japanese Government to concentrate on building the new airport. However, in 1964, even before the construction boom of the airport, fast train appeared. This is also a blow to JAL.
The local and national politicians continue to lobby the government to build airports everywhere. Almost every prefecture of Japan has the airport. Airport to be opened 98 years ago in Shizuoka, about 50 kilometers from Mount Fuji. All airports should be served by JAL.
Regardless of the burden imposed to JAL, during this time can still be flying JAL. JAL wings can not be separated from the history of Japanese development. Countries that was devastated in World War II had managed to rise as an Asian tiger. Finally, the economic strength of Japan’s second largest after the United States.
However, Japanese people are now driving higher productivity 1960s has aged. Population growth also fell.
Japanese creativity, to create an economic base nonmanufaktur, too sluggish. Japan continues to rely on the economy with its manufacturing base even with high quality. However, China recently became the largest competitor in the manufacturing sector. It is estimated that China’s economic strength will be in second place, displacing Japan in 2020.
For years, Japan was beaten deflation that would not go over. When nearly recovered, instead of hitting the global crisis. Sluggish economic growth, also discourage Japanese passenger flows in the past so incessantly brothels.
Tough competition from airlines of the world, both Asia and the U.S., also continued to hit the JAL, known safe and expensive.
It is Japan’s pride if the person working at JAL. Family life guaranteed, complete, up to a very large retirement benefits. However, these benefits also bear the financial problems on JAL.
Hope is still there for JAL to exist. Of the 134 Japanese companies that declared bankruptcy in 2004 and 2009 period, approximately 50 percent can improve. Only 1.5 percent of bankrupt firms that were liquidated, according to data from Teikoku Databank.
The companies on average it takes 1.7 years to get out of the process of restructuring. Maybe after three years of running the restructuring, JAL will re-emerged victorious.
However, it is surely only in the form of a smaller company and is no longer able to serve 217 airports in 35 countries and regions. JAL may also not be able to carry 53 million passengers again like last year, which as many as 41 million is for domestic routes.
JAL will no longer be the world’s largest airline, in terms of frequency of regular flights like the past.
Analysts from Nomura Securities, Makoto Murayama, said JAL is also wrong calculations about the potential market. The ANA is much more professional and competitive market prospects into account.
JAL had long been financially feasible. Sustain economic giant with an injection of government funds many times. “Giant number two in the world economy has started aging, and aging also the triumph of JAL in the air,” the writing on the news agency Agence France Presse on January 19.
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