JAL Sees Year Loss, All Nippon Cutting Pay

Japan Airlines is likely to post a pretax loss for the year ending March 31, and All Nippon Airways is seeking to cut employees' wages an average of 10 percent starting in April in two more signs of airline industry turbulence, the financial daily Nikkei said in its Friday edition.

Nikkei said JAL appears to have suffered a loss of about JPY26 billion yen (USD$284.2 million) before taxes on revenue of about JPY1.56 trillion for the first nine months of its fiscal year due to a steep drop in business travel caused by global economic malaise.

Customer traffic is expected to fall further in the fourth fiscal quarter, and JAL could need to raise capital if results remain under pressure for a prolonged period, the paper said.

All Nippon, which employs about 30,000, seeks to cut the pay of non-managerial employees about 3 percent for the year starting in April, with managers seeing 15 percent to 20 percent reductions. ANA expects the cuts would save it JPY10 billion to JPY20 billion for the year.

ANA has submitted the pay cut request to its unions, Nikkei said, and the unions are likely to fight the move.

ANA is expected to argue that the 10 percent cut is necessary to prevent layoffs, but it could agree to throttle back on the size of the pay cut, Nikkei said.

The wage cut would be limited to the coming fiscal year. ANA cut the pay of its executives 20 percent to 30 percent in January.

Nikkei said ANA hopes to reach agreement with unions by mid-March.

(Reuters)