2012年6月21日 星期四

Japan Airlines Corporation (JAL) delisted/applies for relisting

New JAL chief relies on 'amoeba' style for rebound


photoJapan Airlines Corp. Chairman Kazuo Inamori, right, inspects the company's aircraft maintenance facility at Tokyo's Haneda Airport on Tuesday with JAL President Masaru Onishi. (AZUMI FUKUOKA/ THE ASAHI SHIMBUN)
Japan Airlines Corp. restarted Monday under a new chairman who promised to introduce an "amoeba" style of management and eliminate the airline's red tape that has strangled profits and worker enthusiasm.
"I think that JAL was a bureaucratic organization. I want to change the minds of its executives and other employees so that they become conscious about profits and losses," Kazuo Inamori, the new chairman, said at a news conference in Tokyo.
Inamori, 78, said his amoeba style increases a sense of management among employees and rejuvenates their interest in profitability.
Although Inamori has a track record of success, turning around JAL, which filed for bankruptcy protection in January, poses perhaps his most difficult challenge.
The airline has fallen into financial trouble several times since the Sept. 11, 2001, terrorist attacks against the United States. However, JAL "overcame" the difficulties through government assistance.
"Every time (government) money was poured in, JAL took a breather and became remiss. The government overprotected the airline," a senior official of the transport ministry said.
New JAL President Masaru Onishi agreed that the government handouts led to laziness within the airline.
"Without making efforts to get funds from the markets, we thought that we could just obtain assistance from the (government-affiliated) Development Bank of Japan," Onishi said.
In the news conference, Inamori said a new mind-set was needed among JAL employees.
He cited his success in reaping annual sales exceeding 1 trillion yen ($11.1 billion) each at electronics giant Kyocera Corp. and mobile phone network operator KDDI Corp., as well as turning around the fortunes of copy machine maker Mita Industrial Co., now called Kyocera Mita Corp.
Under the amoeba method, employees are split into teams of up to several dozen members. The leader of each team "manages" the others to increase earnings per hour.
The performance of each team is evaluated at the end of each month and disclosed to all company employees on the first day of the following month.
A team leader who has reached a high performance level is promoted to manager of a bigger team.
Giving employees a strong awareness of management leads to increased productivity of the entire company, Inamori said. The system also encourages employees to do their jobs quicker.
While Inamori expressed confidence that amoeba management will function well in rehabilitating JAL, he acknowledged it will be a tough challenge.
Mita Industrial, which had been placed under bankruptcy protection, became a group company of Kyocera in January 2000. After adopting the amoeba management style under Inamori, the company reached its rehabilitation target in three years, seven years ahead of schedule.
Managers and their subordinates at Kyocera Mita also held frequent drinking sessions to brainstorm, discuss new themes and prevent numerical targets from being the only focus.
However, the history of JAL is very different from those of Kyocera, KDDI and Kyocera Mita. In addition, the airline industry could prove a more complicated sector than the electronics and telecommunications industries.
There is also the question surrounding Inamori's age. He said he would come to the office for only about three days a week due to health reasons, so it might be difficult to spread his ideas to JAL employees.
"In the amoeba management, it is important to change the minds of employees," an executive at Kyocera said. "If I use an analogy, it is like Chinese medicine therapy that gradually reforms one's physical constitution.
"I wonder if the method will work well in the current JAL, which needs powerful medicine or even surgery."


JAL applies for relisting on Tokyo Stock Exchange

June 21, 2012
In a remarkable turnaround, Japan Airlines Co. applied June 20 for relisting on the Tokyo Stock Exchange.
The carrier is expected to go public again in mid-September, just two years and seven months after it was delisted.
It signals the airline's efforts to reorganize its management structure and return to profitability.
In January 2010, JAL filed for bankruptcy under the Corporate Rehabilitation Law.
This led to the Enterprise Turnaround Initiative Corp. of Japan, a public-private fund, to invest 350 billion yen ($4.4 billion) in JAL and acquire 96.5 percent of the airline's shares.
Support from the fund is limited to only three years by law. Thus, it will be unable to recover the invested money unless JAL stock is relisted by next January.
According to analysts, the total market value of JAL's shares will reach between 600 billion yen and 700 billion yen if the airline is relisted.
When the stock is relisted, the fund is expected to not only recoup its investment but come out ahead.
JAL's quick return to the TSE reflects strong state support and an upturn in its business performance.
JAL injected profitability management systems in each business division after Kazuo Inamori, founder of Kyocera Corp., an electronics equipment maker, became its chairman.
As part of its restructuring, JAL slashed 16,000 jobs, reviewed wages and abolished money-losing routes.
JAL turned an operating profit of 204.9 billion yen in the fiscal year that ended in March 2012. Net profits reached 186.6 billion yen. Both figures were the largest on record for the airline.
The ratio of operating profits to sales amounted to about 17 percent, compared with just 6.9 percent for All Nippon Airways Co., JAL's main rival.
JAL's midterm management plan, released in February, said the airline expects to keep its profitability rate at 10 percent or higher for five years starting April 2012.
As of the end of March 2011, JAL posted accumulated losses of 1.2 trillion yen.
Even if the airline returns to stable profitability, it will not be obliged to pay corporate taxes to the government while its earnings are offset by accumulated losses. In the fiscal year that ended March 2012, JAL was able to skip payment of an estimated 35 billion yen in taxes.
Under the Corporate Rehabilitation Law, banks forgave some 520 billion yen in credits to JAL. This brought down JAL's snowballing interest payments.
"We hope that a fair environment is secured for competition," said Shinichiro Ito, ANA president, on preferential treatment to JAL.
JAL will focus on increasing its international routes after making severe cutbacks.
This will entail a critical look at associated costs, including expenses for aircraft purchases and payrolls. Competition with low-cost carriers is also intensifying.
By putting priority on business performance, JAL hopes to lure many individuals and institutional investors.
"The challenge is whether investors think that JAL’s profitability has really recovered," said one analyst.
The Tokyo Stock Exchange is expected to approve the relisting of JAL stock on its First Section in mid-August after checking the airline's assets and business performance forecast. The stock exchange is expected to relist the airline on Sept. 19.
(This article was written by Keiko Nannichi and Rui Hosomi.)


TOKYO, Feb. 20 (Xinhua) -- Shares of Japan Airlines Corporation (JAL), the nation's largest airline, which filed for bankruptcy protection a month ago, was officially delisted from the Tokyo Stock Exchange (TSE) on Saturday.
Shares of the cash-strapped carrier finished the company's last trading day on the TSE on Friday at 1 yen, unchanged since Feb. 2, ending the carrier's almost half a century of presence on the bourse.
Around 27.6 million shares were offloaded on its last day of trading.
"This will undoubtedly be a symbolic case in which shareholders are made to take responsibility," said Tsuyoshi Segawa, an equity strategist at Mizuho Securities Co.
"However, I do think that such an end could have been avoided had JAL taken a different path at an earlier point."
Japan Airlines' filing for bankruptcy protection on Jan. 19 marked one of Japan's biggest ever non-financial corporate failures and the iconic carrier, once the proud flagship and symbol of Japan's economic prowess, has entered into a new era of state-led rehabilitation under the Enterprise Turnaround Initiative Corporation of Japan (ETIC).
Dr. Kazuo Inamori, a well-respected entrepreneur and founder of electronics giant Kyocera Corp., became the new chairman and CEO of Japan Airlines Corp. (JAL) on Feb. 1, replacing Haruka Nishimatsu, who resigned as part of JAL's bankruptcy proceedings.
Inamori, well known for turning around ailing companies, has teamed up with Masaru Onishi, the former head of Japan Air Commuter Co., a JAL subsidiary who has assumed the role of president and group chief operating officer of JAL.
JAL, once revered as national symbol of Japan's postwar boom and having transformed a handful of leased planes in 1951 into a nearly 50,000 staff mega-carrier with a fleet of almost 280 aircraft, has, since 2001, struck three previous rescue deals with its banks and the Japanese government.
JAL was first listed on the TSE's Second Section in 1961 and then moved to the First Section in 1970. After integrating operations with Japan Air System under a new holding company in October 2002, the carrier's shares hit a high of 366 yen in October 2003.
The stock fell to the record low of 1 yen for the first time on Jan. 22, three days after JAL filed for bankruptcy protection.
The state-led rehabilitation plan is largely expected to slash the number of JAL's subsidiaries by around 50 percent, and around 15,700 jobs, roughly 30 percent of its group workforce, will be cut by the business year through March 2013, according to sources with knowledge of the matter.
Additionally the firm will dispense with 53 aged, fuel- inefficient 747 liners, in favor of 33 more cost-effective smaller jets and a number of superfluous and domestic and international routes are to be discontinued, in light of falling patronage and rising fuel costs. 

Editor: An