OSAKA - Japan Airlines just can't seem to
stay out the headlines. JAL is increasingly losing
public confidence for reasons ranging from
internal rivalries and corruption scandals to the
company's poor safety record. JAL remains Asia's
largest airline and the the world's 11th-largest,
carrying 34 million
passengers annually, but the
carrier seems trapped on a downward trajectory.
This week the JAL-inspired media buzz is
that company president Toshiyuki Shinmachi has
threatened to dismiss four board members, the
latest episode in a long saga of infighting at the
airline. The four board members, who recently
asked Shinmachi and two other top executives to
step down in what Japanese media labeled a "coup",
are being held responsible for company losses on
international flights.
"It is an urgent
task for board members and employees to [unite]
and overcome the difficulties we are
encountering," Shinmachi was quoted as saying in
the Mainichi Shinbun. "Before holding the
president responsible for the difficulties, the
board should feel a sense of responsibility for
the deficit suffered by the divisions they are in
charge of."
On February 6 the company
reported that uncompetitive Asian routes and high
fuel prices caused it to incur 23.10 billion yen
(US$199 million) in losses during the
April-December 2005 period. Adding insult to
injury, Standard & Poor's recently cut JAL's
credit rating, downgrading the airline to between
BB- and B+, four levels below "junk" status.
In striking contrast, domestic competitor
All Nippon Airways last month reported an 11%
increase in its nine-month operating profit,
citing strong demand from business travelers as
well as the beneficial effects of cost-cutting
measures. JAL has acknowledged losing business to
ANA.
JAL has recently undertaken
cost-cutting measures intended to dig itself out
of its financial rut, including the
discontinuation of some overseas routes, as well
as a wage cut that will affect 550 managerial
positions. JAL also plans to extend and increase a
fuel surcharge on international flights starting
in March. Meanwhile, Shinmachi has expressed his
intention to remain at his post until March 2007.
The carrier's efforts to turn over a new
leaf suffered a setback when its offices in New
York's John F Kennedy Airport were raided
mid-February by officials from the US Department
of Justice in an investigation into alleged
air-cargo price-fixing, which also snared several
other air-cargo carriers. JAL's Frankfurt premises
were also searched by European antitrust
authorities (see Air cargo shaken by price-fixing
probe, February 22).
But scandals
aside, of greatest concern to the airline is a
perception among the general public that passenger
safety is of secondary importance, and experts and
observers alike are saying this is hurting
business. Last year marked the 20th anniversary of
the Osutaka Ridge crash, the worst single-aircraft
accident in history. In that accident, 520 people
died after JAL Flight 123, a Boeing 747, struck a
mountainside while attempting to return to Tokyo
after a catastrophic tail section failure that
made the plane uncontrollable. The anniversary
brought renewed scrutiny to JAL's record,
especially since the airline has suffered several
safety-related incidents since then, although none
involved fatalities.
"We have been calling
for safety in the sky for 20 years. But we think
the company has become even worse," a spokesperson
for the association of families bereaved by the
Osutaka Ridge crash said to Kyodo News.
While JAL had vowed to create an
environment of "absolute safety" after the 1985
disaster, a series of high-profile mishaps last
year cast doubt on its sincerity. Last March, a
passenger plane flew from Hokkaido to Tokyo
despite the flight attendants' forgetting to make
the emergency slides operable. In August, a plane
operated by JALways (a JAL subsidiary specializing
in flights between Japanese cities and Pacific
Ocean resorts) had an engine burst into flames
minutes after takeoff, raining metal fragments
into a residential area near Fukuoka, injuring two
people on the ground. Also, it was recently
revealed that JAL's jumbo cargo aircraft have been
using the wrong main-wheel parts for more than
eight years.
JAL workers have blamed such
incidents on the increasingly prevalent practice
of outsourcing aircraft maintenance to overseas
companies, such as in China. In fiscal 2004, 38%
of maintenance operations were conducted by
overseas companies, up from 8% in fiscal 1999. JAL
labor unions say that in outsourcing maintenance
work overseas, JAL is getting what it is paying
for: cheaper but much less-skilled labor.
Some JAL mechanics say they consider
themselves to be more thorough than the overseas
companies to which maintenance work is outsourced.
They say they take more pride in their work and
feel that the plane being spot-checked belongs to
them. Currently, morale among these and other
workers is low, with flight attendants even saying
they feel that passengers do not trust them in
emergency situations, according to a recent Kyodo
News report.
The airline has publicly
acknowledged worries about its safety and has in
the past admitted to putting too much emphasis on
punctuality at the expense of safety. The airline
blames internal dissension after a 2002 merger and
said it would hold 100 meetings to listen to
workers' views and to emphasize the need to regard
safety as top priority.
Japan's Transport
Ministry this year issued a rare public warning
demanding an improvement in the airline's safety
record. In response, JAL held 220 emergency
meetings to improve communication between staff
and management. But many in the industry continue
to question whether the company is truly sincere.
Transport Minister Kazuo Kitagawa has made
it clear that JAL's reaction is lacking. He
recently commented to Japanese media: "Problems
have continued - even after JAL received the
ministry's improvement order. This is an
extraordinary situation. The public rightly
remains critical of JAL. So I implore JAL to unite
in ensuring safety."
Matthew
Rusling is a freelance writer based in Osaka,
Japan.
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