JAL Group will reassign around 3,000 employees from its mainline carrier JAL - Japan Airlines (JL, Tokyo Haneda) to budget unit ZIPAIR (ZG, Tokyo Narita) and non-core operations, as business travel continues to lag in the wake of the pandemic, anonymous sources at the company have told the Nikkei.
With international and business travel still well under pre-pandemic levels but demand for domestic services now at over 90% of what they were before the outbreak, the group will pivot more towards operations related to leisure and tourism, the sources said.
Of the approximately 3,000 workers, around 60% will go to non-aviation units such as the e-commerce and aviation product trader Jalux, while the rest will go to budget carrier businesses such as ZIPAIR - originally unveiled in March 2019 as a low-cost long-haul carrier but which eventually launched passenger operations in October 2020 on a smaller scale amid the ravages of the pandemic. It currently specialises in medium-haul routes, alongside two other LCCs in the group - Jetstar Japan, a JV with Qantas, and Spring, which is waiting for its key China market to fully reopen.
JAL had around 35,400 employees across the group as of last year. According to the Nikkei, more than 31,000 of these worked in the core airline business, which does not include the LCC operations. The group had already revealed in the revised version of its medium-term business plan in May that the budget carrier and non-aviation segments would gain 3,000 new staff by 2025, positions to be filled through both reassignment and recruitment.
JAL Group projects demand for its international services to remain at less than 50% of pre-pandemic levels for at least the rest of this fiscal year - until March 31, 2023. The JAL-branded airline businesses earned 70% of the group's earnings before interest and taxes before the pandemic but aims to lower this to 55% by fiscal 2025.
