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Thursday, October 21, 2010

Inamori gave an update on JAL restructuring progress

During a speech at the Foreign Correspondents Club of Japan this week, Japan Airlines (JAL) CEO Dr. Inamori gave a little bit of update on JAL's restructuring progress. Apparently JAL is likely to secured a record operating profit of 100 billion yen in the first half of the fiscal year (April-Sep)! They originally forecast an operating profit of 64.1 billion yen for the entire fiscal year ending in March!

Since Inamori took over in Feb, he has been doing a lot of behind the scene work to fix the corporate culture. He repeatedly criticized the lack of sense of crisis of the management team. To fix the problem, he sent 50 JAL's top management staff to training sessions four times a week to learn how to be a good leader. Inamori even lectures in 6 out of 17 sessions himself. He also took employees out for drinks after work! Now the training has been expanded to about 200 employees and "their awareness on leadership has changed" according to Inamori.

Because of all of the hard work, Inamori has lost roughly 9 pounds since he took the job and he admits it's an extremely hard job and he's exhausted. He is paying extra attention to his health but he does feel his mind becomes sharper :)

So what's next? Inamori wants to boost JAL's capital by trying to secure extra loans from banks but he admits it's hard especially since the banks have just waived massive debts JAL owed. When asked whether they will consider asking foreign funds to boost their capital, Inamori said they will consider every options.

Regarding low cost carrier, Inamori remains skeptical about the plan. He believes JAL should remain a "high-qaulity airline" and should "strictly refrain from pursuing expansion of scale."

Sounds like he wants to finish the restructuring before any expansion, which makes sense. But when ANA launch their LCC by the end of this year and eats away the yield on lucrative routes e.g. Tokyo-Osaka, will JAL be abel to fight back with providing quality service? I am not quite sure but I know will stick with JAL and not switching to the dark side any time soon. Between domestic add-on only costs my 10,000 one-way :p

But definitely good signs for having a recording operating profit in the first half of the fiscal year (whether it's due to strong yen, lower fuel price, or whatever reasons). Congratulations and keep up the good work!

Sources:
Wall Street Journal article 1
Wall Street Journal article 2
jiji.com (in Japanese)


1 comments:

  1. FANTASTIC JOB BY A MANAGEMENT GURU! WELL DONE INAMORI SAN!

    ReplyDelete