JAL Chief Changes Carrier’s Course

TOKYO —  To Junji Ito, Japan Air Lines has been managed like a firm that has had “36 presidents in the last 30 years.”

Many have criticized Japan’s flag carrier since Aug. 12, 1985, when one of its Boeing 747 jetliners crashed on a Tokyo-Osaka flight, killing all but four of the 524 people aboard. But Ito is more than an ordinary critic. He is the new chairman of JAL, brought in with the personal backing of Prime Minister Yasuhiro Nakasone to clean house.

In an appearance at the Japan National Press Club this week, Ito made it clear that he believes that the housecleaning is long overdue.

He said that because the government holds 34.5% of JAL’s stock--JAL was established under a law enacted by Parliament--the Ministry of Transportation has had to approve personnel appointments, operational plans and purchases and sales of important assets.

“It has been as if the minister of transportation was president of Japan Air Lines,” Ito said. “In the last 30 years there have been 36 ‘presidents,’ while the board of directors, lacking any power to make decisions, has acted somewhat like a ‘salon.’ (In fact, the airline has had only five presidents since it was founded in 1951.) Management responsibility has become weak.

“Executives from the top down to section chiefs all listened to politicians. This must be ended. JAL must be transformed from its orientation toward politicians and bureaucrats into an orientation toward customers and profit making.”

Privileged Position at an End

The airline developed an easygoing reliance on “monopolistic-like operations, rather than responding to the needs of customers,” he said. And, under a 1971 government policy guaranteeing JAL an international monopoly and prime domestic routes, “customers just keep on boarding.”

But now the policy that ensured JAL a privileged position been scrapped. Moreover, in the fiscal year that ended last March 31, passengers began to shy away.

A 13.4% decline in domestic passengers helped precipitate a 6.7-billion-yen ($43.2-million) loss after taxes. JAL suspended payment of dividends this year and is unlikely to make enough profit to resume them in the next fiscal year, Ito said.

Ito, who is also chairman of Kanebo, an Osaka company that he helped to broaden from textiles into cosmetics, was named JAL vice chairman last December and promoted to chairman in June. He said he and JAL’s new president, Susumu Yamaji, have made “absolute safety” the company’s top priority.

“We can’t say that it was a coincidence that many accidents occurred in JAL,” he said. “We must break the ‘common sense’ feeling that accidents are inevitable. A reform of the consciousness of all JAL employees to make them believe that complete safety is possible is necessary.”

New Attitude Among Maintenance Crews

For the first time, pilots, maintenance crew members and ground flight supervisors have been instructed to cancel any flight if any of them has a feeling of “uneasiness” about an aircraft, he said.

A new system of assigning a 15-person maintenance crew to care for an aircraft “from the day it begins operations until the day it is retired from service” has produced a new attitude, Ito said.

For example, he said, a pilot recently reported a “strange sound” when he landed at Osaka on a flight from his home base in Tokyo and called the maintenance chief in Tokyo about it. “Previously,” he said, “the response would have been, ‘we’ll take a look at it when you get back to Tokyo.’ But this time the maintenance chief boarded the next plane and inspected the aircraft in Osaka before it flew again. The pilot was very happy with this change.”

Ito said that in response to acknowledgment from Boeing Co. that its 1978 repair of the jet that crashed last August was “faulty,” JAL has abandoned its previous policy of entrusting to aircraft manufacturers the responsibility for the technical performance of its aircraft.

The tail section of the plane that crashed had been damaged in a rough landing in 1978. It was improperly repaired and a rear bulkhead separating the passenger cabin from the tail apparently gave way in flight. The resulting decompression blew off part of the tail, depriving pilot Masami Takahama of the hydraulic systems he needed to control the plane.

Last April 1, the airline opened its own technological research center with the aim of producing technicians “capable of dealing on an equal footing with the engineers of Boeing and Douglas,” the manufacturers of the planes that the firm flies, he said.

Ten years ago, JAL designated pilots as part of company management and thus not eligible to join unions. But Ito said the pilots have now responded to encouragement from him to set up a union, even though the pilots union became the fifth labor union to represent JAL employees.

Since the pilots union was formed, co-pilots have stopped wearing the anti-management “struggle badges” they used to wear in flight, and cabin teamwork has improved, Ito said.

Ito also criticized JAL’s overall labor relations.

Infighting at Unions

He said management had alienated workers to such an extent that unions grew accustomed to battling management. They also fought among themselves in an attempt to enlarge their membership and influence, thus “burning up energy” that should have gone to providing service to customers and maintaining operations, he said.

Ultimately, JAL hopes that its unions will amalgamate into one body, as is typical at most Japanese firms. But in the meantime, they will all be treated equally and promotions will be made without reference to “factional infighting,” Ito said.

He said he also found that the entire structure of Japanese aviation contributed to JAL’s troubles.

All three of the country’s airlines, he said, “spent all their time appealing to the government and politicians to grant them special favors for their own benefit.”

Now, Ito said, top executives of all three airlines get together once a month with Transportation Ministry officials to discuss industrywide problems.

Last August’s disaster also triggered a decision to end political intervention in JAL’s management by transforming the special semi-government corporation into a purely private one next year. Depending on when Parliament enacts enabling legislation, the transformation will take place either next July or next October, Ito said.