Japan Airlines’ bankruptcy filing Tuesday is being welcomed by those who’re calling for more accountability in Japan Inc.’s affairs.
Too much, though, remains unresolved to issue a final ruling on this restructuring.
Unlike past government-funded bailouts that’ve left JAL’s underlying problems unresolved, this time all of the carrier’s major stakeholders look set to take a hit as those issues are addressed.
It’s only fair. Each of these groups — former workers with enviable pensions, current employees who refused to concede enough job or pay cuts, and banks that kept lending under the assumption that Tokyo would cover them — has played a role in kicking JAL’s structural problems down the road.
JAL’s three-year plan will slash the company’s work force by about one-third and ditch 34 loss-making routes. Lenders to Japan’s former flag carrier will forgive about $8.1 billion in loans, and shareholder equity will be wiped out. More than a few of JAL’s indecisive executives, meanwhile, will also be replaced.
Credit to Tokyo for steering JAL into bankruptcy protection. But it is reasonable to wonder if the Democratic Party of Japan can sustain the political will to stand up to vested interests as it looks to cut jobs and routes.
[adrotate group=”15″]
