Japan Airlines has been facing real dilemmas. By reading both articles, “Japan Airlines ‘hours away from bankruptcy‘” and “Progress of JAL Group Medium Term Corporate Plan,” we know that Japan Airlines is facing the challenges, and is trying to recover from bankruptcy. Established in 1951, JAL became the national airline of Japan in 1953. There were many aspects which lead to the failure of Japan Airlines.
Firstly, the company’s historical background with the employees lifelong employment has lead to the failure. Japan Airlines has been providing pensions to all employees. JAL has been providing support for a life time, which means they are spending money on employees who are not currently working at JAL. This lead to an increase in the cost of production.
Secondly, the global recession has also drastically impacted JAL. Due to the global recession, less people were willing and able to afford the service of Japan Airlines. The demand of people wanting to ride JAL has decreased.
Thirdly, due to government interventions, JAL had been accessible by many small airports all around Japan. This may sound very good at first. However, many of these empty flights to small airports has lead to an increase in the cost of production. Political leaders of many provinces in Japan has promised the citizens that they will build airports in the town so that people can travel easily. However, this government intervention created losses more than profits to JAL.
In order to recover, JAL has been reducing the amount of labor cost. In order to gain back the status as the best Airline in Asia, JAL has been promoting all employees to have an extra good attitude towards the customers. Both international and domestic routes have been reduced as well. Our Question is … “Is JAL going to achieve a miraculous recovery?”
Hey Serina
I liked your post, I think you summarised the articles very well, and talked about different economic things like the production costs and decrease in supply. I think you could have put in a diagram however. The IB (and Dr A too) has a big mushy spot for diagrams, and in second year, they are essential.
I also think you could have mentioned elasticity, as I believe that’s what you’re doing at the moment?
For example, you could talk about how elastic JAL flights are. You mentioned how the price went up, so people didn’t demand as much. That is price elasticity
Comment by Kelly — November 15, 2010 @ 9:36 am |
Well done Serina. I enjoyed reading your article.
You have mentioned on supply and demand problems that JAL faces. It is well thought and organized.
However, you might want to add some ideas of elasticity. How JAL has predicted on four types of elasticity.
Comment by Ansi — November 15, 2010 @ 2:42 pm |
[...] Japan Airlines has been facing real dilemmas. By reading both articles, "Japan Airlines 'hours away from bankruptcy'" and "Progress of JAL Group Medium Term Corporate Plan," we know that Japan Airlines is facing the challenges, and is trying to recover from bankruptcy. Established in 1951, JAL became the national airline of Japan in 1953. There were many aspects which lead to the failure of Japan Airlines. Firstly, the company's historical backg … Read More [...]
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