Il crollo da 25 miliardi di dollari di Japan Airlines e il suo ritorno

Il crollo da 25 miliardi di dollari di Japan Airlines e il suo ritorno

Imagine an airline revered as a national 
symbol, its red crane logo a sign of pride and reliability. Now imagine that same airline’s 
stock plummeting to just a few yen a share, its debt so large the entire company is 
worth less than a single jumbo jet. In 2010, Japan woke up to exactly that scenario. How 
could a flagship carrier that once boasted the world’s largest fleet of Boeing 747s fall so 
far, so fast? And perhaps even more astonishing: how did JAL climb back from the brink to 
become one of the world’s most profitable airlines just a few years later? What 
happened to JAL? This is the story of its collapse and recovery—a cautionary 
tale and a hopeful lesson, all in one. JAL’s story begins as a phoenix of post-war Japan. 
Founded in 1951 as a government-owned carrier, it became Japan’s official flag airline 
by 1953, carrying the nation’s hopes in its wings. For decades, JAL expanded rapidly 
alongside Japan’s booming economy. By the 1980s, it was the world’s top-performing airline for 
five years straight, in both passenger and cargo transport. JAL even amassed the largest fleet of 
Boeing 747 jumbo jets the industry had ever seen. In those days, a JAL flight was the way to 
travel – a source of national pride much like Singapore Airlines is for Singapore. JAL had 
become synonymous with service and success. But beneath the glossy reputation, cracks were 
forming. JAL had been a state-owned enterprise insulated from normal market pressures 
for years. After privatisation in 1987, it lacked the survival instinct needed in 
a competitive, deregulated airline market. The airline picked up some bad habits: 
costly inefficiencies, bloated staffing, and a mindset that the government would 
always back it up. During the bubble economy of the 1980s, JAL’s management grew complacent and 
overambitious. They poured money into ventures far beyond flying – buying hotels, resorts, and even 
Manhattan’s Essex House hotel for US$190 million. The idea was to create a travel empire, 
but these side ventures proved disastrously optimistic. According to an analyst, many 
of JAL’s non-core investments turned out “unrealistically optimistic, non-performing 
investments [that] ended up dragging the company’s main business down.”. JAL was 
diversifying straight into turbulence. The 1990s brought reality crashing down. Japan’s 
economy stumbled in the early ’90s, and JAL saw its first loss in 1992 – ¥53.8 billion in the red. 
That kicked off seven consecutive years of losses, forcing painful cuts. JAL slashed thousands 
of jobs and sold off prized assets (including the Essex House) to patch the bleeding. It 
turned out that bigger wasn’t always better: JAL’s fleet of jumbo jets often flew half-empty, 
as domestic travel patterns changed and smaller aircraft became more efficient for regional 
routes. Massive overcrowding at Tokyo’s Haneda Airport in the past had justified large 
jumbos, but once new regional airports opened, demand fragmented and those 747s became expensive 
liabilities. The airline was “structurally weak,” in the words of one analysis, and the 1990s 
exposed that weakness brutally. By the 2000s, JAL was lurching from one crisis to another. 
A string of global disasters rocked aviation: a pandemic outbreak, a war in the middle 
east, and then 9/11 – all of which slammed travel demand. JAL’s already thin profit 
margins evaporated. The airline resorted to government-backed loans to survive. JAL borrowed 
heavily from Japan’s state-owned Development Bank, piling up debt to ¥240 billion by mid-2000s. 
And as if external shocks weren’t enough, JAL made a fateful “turning point” decision in 
2002: it merged with Japan Air System (JAS), the country’s third-largest carrier, 
to bolster its domestic presence. The merger did make JAL temporarily one of 
the world’s largest airlines, but it also created a logistical nightmare. JAS’s fleet used 
different aircraft types – McDonnell Douglas, Airbus – incompatible with JAL’s mainly Boeing 
fleet. Suddenly JAL had to maintain multiple sets of spare parts and train crews on numerous 
aircraft models. Worse, Japanese regulations prevented crew from being multi-rated across 
aircraft types, so JAL lost flexibility. “All of a sudden you have multiple plane makers…multiple 
spare parts, multiple crews,” noted one Professor, who studied JAL’s case. The well-intended merger 
only amplified inefficiency. Internally, labor issues compounded the struggle. JAL had multiple 
labor unions for different employee groups, which fractured its workforce and made management 
difficult. Petty rivalries and rigid work rules flourished; for example, before bankruptcy, JAL’s 
pilots enjoyed perks like company-paid chauffeur rides to the airport and got paid whether they 
flew or not. Such perks, along with guaranteed seniority pay, had grown out of JAL’s legacy as 
a “company that can’t fail.” By the late 2000s, JAL was carrying a mountain of problems: high 
costs, heavy debt, old planes, fierce competition from domestic rival All Nippon Airways (ANA), 
and a stagnant home market. Even as it remained (on paper) Asia’s largest airline by revenue, 
JAL was bleeding cash and losing altitude fast. Several turning points in the 2000s 
set the stage for JAL’s collapse. One was 2009, as the global financial 
crisis added yet another gust of turbulence. JAL posted operating losses 
in three out of five years since 2003, culminating in an operating loss of ¥63 billion 
in 2008. By March 2009, its debts had ballooned, and the airline was teetering on the edge. The 
new Japanese government, led by the Democratic Party of Japan (DPJ) at the time, grew alarmed. 
In September 2009, the Transport Ministry formed a task force to find a turnaround plan for 
JAL. Various dramatic ideas were floated: even a merger with arch-rival ANA was considered 
– which would have created a mega-airline monopoly in Japan – but ANA bristled at the idea 
and it went nowhere. Behind the scenes, foreign airlines smelled opportunity. American 
Airlines (and its Oneworld alliance partners like British Airways) and Delta Air Lines (leading the 
SkyTeam alliance) competed to partner with JAL. In late 2009, American and friends dangled a $1.4 
billion investment to keep JAL in Oneworld. Delta countered with a $1 billion offer if JAL would 
defect to SkyTeam – Delta even claimed switching alliances could boost JAL’s revenues by $400 
million a year. JAL’s leadership was torn, and media speculation ran rampant on whether JAL 
would join Delta. (Spoiler alert: it ultimately didn’t – JAL stayed with Oneworld, after much 
drama.) These alliance courtships underscored how pivotal JAL had become in the global 
aviation chessboard, even as it was in distress. The breaking point came in January 2010. After 
weeks of desperate efforts to avoid outright failure, Japan Airlines applied for bankruptcy 
protection on January 19, 2010. It used Japan’s Corporate Rehabilitation Law (analogous to 
Chapter 11 in the U.S.) to restructure. Overnight, one of Japan’s proudest “blue chip” companies had 
fallen. It wasn’t a minor bankruptcy – it was the largest bankruptcy ever by a non-financial 
company in Japan, and the fourth-largest bankruptcy in Japanese history. JAL’s debts stood 
at a staggering ¥2.3 trillion (about $25 billion), and its share price – which had plummeted over 
90% in just a few weeks – hit an humiliating low of ¥3 on the Tokyo Stock Exchange. The stock was 
promptly delisted in February 2010. For context, at its final market value of roughly $150 million, 
JAL was worth less than a single Boeing 747 jumbo jet. This was unthinkable for a company that 
once symbolized Japan’s economic might. “I thought there was no way JAL would fail,” one 
shocked customer told reporters at the time, capturing the public disbelief. But it did – 
or rather, it filed for bankruptcy to avoid failing completely. The Japanese government, now 
fully alarmed, had to act decisively to save an essential service (and perhaps save face for Japan 
Inc.). What followed was a government-led bailout and an aggressive restructuring plan that 
would become the stuff of corporate legend. Saving JAL required an extraordinary effort 
combining state support with new leadership. The core of the rescue was the Enterprise 
Turnaround Initiative Corporation of Japan (ETIC) – a state-backed turnaround fund. In 
exchange for a lifeline, JAL had to accept brutal concessions. According to Reuters, the 
plan injected ¥300 billion (about $3.3 billion) in fresh taxpayer-backed capital and provided 
a credit line of ¥600 billion for operations. Moreover, ¥730 billion in debt was forgiven by 
creditors as part of the bankruptcy deal. Major Japanese banks (Mizuho, Tokyo-Mitsubishi UFJ, 
and Sumitomo Mitsui) agreed to waive hundreds of billions in loans to keep JAL alive. Shareholders 
were completely wiped out – their stock now worthless. It was an all-or-nothing reset. ETIC 
and the government didn’t stop at financial aid; they demanded deep structural reforms. JAL’s 
entire board of directors resigned in shame. A state-led restructuring plan mandated 
massive layoffs and route cuts. Roughly 15,700 employees – a third of JAL’s workforce – 
would lose their jobs. The airline also had to slash at least 30 unprofitable routes (eventually 
49 routes were axed) and ground or sell dozens of aircraft. In fact, reports at the time said JAL 
would retire 53 of its largest jets and replace them with smaller, more efficient planes better 
suited to actual demand. Nothing was sacred: even employee pensions were on the chopping 
block. After arduous negotiations, JAL cut pension payouts by 50% for current staff and 30% 
for existing retirees – an almost unthinkable move in Japan’s traditionally job-for-life corporate 
culture. “JAL lacked strong governance and was unable to keep up with changing times,” admitted 
Akitoshi Nakamura, an executive director of ETIC, in a candid press conference. He noted that in 
a sense “JAL encapsulates…a typical problem and hurdle for Japan as a whole” – a reference to how 
Japan’s once-great companies were struggling to adapt to a new era. The government’s message 
was clear: JAL would get one last chance, backed by about ¥900 billion in aid, but only 
if it fundamentally transformed itself. No more half-measures or band-aids; this was going to 
be radical surgery. The lead surgeon arrived in the form of an unlikely new CEO. In a dramatic 
move, the government recruited Kazuo Inamori, a 77-year-old celebrated entrepreneur (founder 
of Kyocera and KDDI) – who was also an ordained Buddhist monk – to become JAL’s chief executive 
in 2010. Inamori had zero experience in the airline industry, and by all accounts he had 
been comfortably retired. Transport Minister Seiji Maehara personally visited Inamori to 
plead for his help, believing only a bold, outside leader could break JAL’s old habits. 
It was the first obvious break with JAL’s past hierarchy: “a very different airline is expected 
to emerge under the stewardship of the 77-year-old Inamori,” noted The Guardian, highlighting 
how shocking (and promising) this choice was. Inamori himself was a self-confessed novice 
in aviation, but he was known for two things: an almost philosophical management approach and 
a track record of rescuing companies (he had a reputation as a corporate turnaround artist, 
and yes, as a Buddhist he literally believed in karma in business). The New York Times quipped 
that JAL was getting not just a CEO, but a “Zen billionaire” as its savior. Many were skeptical – 
would throwing a monk into the cockpit really save this crashing plane? But the government and ETIC 
were betting that Inamori’s outsider perspective and no-nonsense leadership could succeed where 
conventional airline managers had failed. As former ETIC chairman Hideo Seto explained their 
decision: “The airline had been running on a semi-government style of management…The leader 
had to come up with something to break that mold. We required a different kind of leader.” 
Inamori was that different kind of leader. Kazuo Inamori stepped into JAL’s cockpit with 
a mission: change the culture, cut the flab, and teach this old airline how to fly 
profitably again. He declined any salary for himself – literally working for free 
– to show he was in it for the mission, not money. “The fact that I worked for no salary 
influenced the staff,” Inamori later said, “They could see that I was desperate to rebuild 
the company, even though I had no links to JAL previously.”. It was an extraordinary gesture, 
especially in contrast to the usual image of highly paid executives. Inamori’s philosophy 
emphasized putting people before profit and doing what is right; paradoxically, that approach ended 
up restoring profits beyond anyone’s expectations. One of Inamori’s first priorities was to instill 
a sense of financial discipline at every level of the company. In JAL’s past, management often 
looked at aggregate numbers and didn’t scrutinize which routes or departments were losing 
money. Inamori changed that immediately. He demanded to know exactly how much profit or 
loss each flight route generated. Each month, he pored over every department’s 
figures; if a number wasn’t improving, he would pointedly ask “Why?”. This granular 
focus was new to JAL’s managers, who could no longer hide poor performance behind the veil 
of network-wide accounting. “No more passing the buck or hiding poor performance within a rigid 
hierarchy,” as one account described – JAL had to face reality on every route, every expense. 
To make this work, Inamori introduced his famous Amoeba Management system from Kyocera. 
Under this system, JAL’s massive workforce was divided into many small teams or “amoebas,” each 
with their own leader and a degree of autonomy. Instead of top-down commands, these mini-units 
were encouraged to act like entrepreneurial businesses within the business. Every employee 
was tasked with thinking about how their actions affected the company’s bottom line. This 
was a radical departure from traditional Japanese corporate culture, where employees were 
used to just following orders and assuming the company would take care of them. “People 
had taken for granted lifelong employment and… just serving their bosses. There was a 
lot of inertia,” explains Prof. Terence Fan, who studied JAL’s turnaround. Amoeba management 
forced employees to snap out of that inertia. The message was: if JAL doesn’t make profits, no 
one’s job is safe – a stark truth that Inamori conveyed to a workforce not accustomed to such 
bluntness. Parallel to the cultural shake-up, a dramatic structural downsizing was underway. 
We’ve already noted the layoffs – nearly one in three employees had to go. Those who stayed 
saw their pay cut by up to 30% across the board. In fact, JAL’s salaries were brought down to about 
20% lower than those at rival ANA after the cuts. Perks and inefficiencies were axed mercilessly: 
as Nippon.com detailed, pilots lost their company cars and plush expense accounts, and the old 
system of paying crew even on days they didn’t fly was scrapped. Now, if you weren’t in the 
air, you weren’t getting paid – simple as that. These changes sent a powerful signal that the era 
of entitlement was over. Inamori also unloaded non-core assets to raise cash and streamline 
the business. JAL sold off subsidiaries, even some profitable ones, to focus on 
its core airline operation. For example, the airline’s stakes in travel agencies and 
its credit card business (JAL Card) were sold, bringing in money but also sparking concern 
that JAL might be “cutting muscle” along with fat. But desperate times called for bold 
moves – JAL needed a leaner structure at all costs (quite literally). Fleet modernization 
was another key reform. Those fuel-guzzling Boeing 747s and other older planes were swiftly 
retired or sold. JAL moved to a smaller, more fuel-efficient fleet centered on Boeing 737s 
and 767s for medium-haul flights, later adding modern 787 Dreamliners for long-haul routes. 
This not only cut fuel and maintenance expenses, but it also meant some senior pilots 
who were only certified on jumbos had to retire early (leading to some lawsuits from 
disgruntled pilots, but JAL pushed through). Crucially, these reforms were backed by an unusual 
alignment of forces. Normally, JAL’s unions would have fought tooth-and-nail against layoffs and 
pay cuts. But with bankruptcy looming and ETIC exerting pressure, the unions were compelled to 
cooperate (albeit grudgingly). The government’s heavy hand gave Inamori cover to implement changes 
that would have been “unthinkable in the past”. And Inamori, for his part, genuinely tried to win 
employees’ hearts even as he imposed tough love. He emphasized that “the employees’ welfare” was 
“first and foremost” in his philosophy – meaning that by saving the company, he was ultimately 
saving their livelihoods in the long run. It was a delicate balancing act: cut jobs and pay 
now, so that more jobs could exist in the future. Inamori also practiced what he preached by 
demonstrating personal sacrifice (no salary, remember) and a laser-focus on numbers 
coupled with empathy. According to Hideo Seto, “he was very thorough with figures… that’s 
one reason the company could change so fast. It was a matter of brains and commitment.” That 
mix of analytical rigor and commitment from the top filtered down through the ranks. The results 
of JAL’s cultural and structural overhaul were nothing short of astounding. In just two years, 
JAL went from massive losses to record profits. For the fiscal year ending March 2012, Japan 
Airlines earned an operating profit of around ¥204–205 billion, which at that time was 
industry-leading worldwide. In fact, JAL was, by some metrics, the most profitable airline on 
the planet in 2012. To put that in perspective: this company had been losing money every 
year, posting a ¥133.7 billion operating loss in FY2009. Now, it was posting over ¥200 
billion in operating profit – a turnaround of epic proportions. Even JAL’s turnaround planners 
were surprised. “Its profit of ¥186.6 billion seemed a miracle,” said Hideo Seto, “given that we 
aimed for and expected a profit of ¥60 billion.” Inamori and his team overshot their profit 
target by more than 3×, an almost unheard-of feat in corporate turnarounds. By 2011, JAL’s 
cost base was dramatically lower – labor costs, fuel costs (thanks to newer planes), and interest 
costs (thanks to debt waivers) were all slashed. The airline even got a big tax break: a ¥360 
billion tax loss carryforward (roughly $4.5 billion) meant JAL wouldn’t pay corporate taxes 
for years, further boosting its net income. It’s no wonder some competitors cried foul. The 
ultimate validation of JAL’s rebirth came in September 2012. Less than three years after 
bankruptcy, JAL returned to the Tokyo Stock Exchange in a blockbuster IPO. The initial 
public offering raised about ¥663 billion (approximately $8.5 billion), instantly making 
it one of the biggest IPOs of the year (in fact, the second-largest globally in 2012, only behind 
Facebook’s IPO). For the Japanese government, it was a sweet success – the state-backed 
ETIC fund, which had injected ¥350 billion of taxpayer money into JAL in 2010, was 
able to sell its entire stake at IPO, roughly doubling its investment. In other 
words, the taxpayer got paid back with profit, which is not a common ending for bailout 
stories. JAL’s relisting day (September 19, 2012) was triumphant: the stock 
opened around ¥3,790 per share, a far cry from the ¥3 it had been in 2010. The 
message was clear – JAL was back from the dead.

Japan Airlines had declared bankruptcy in 2010, the largest non-financial corporation to ever do so.
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Brought to you by the Behind Asian Team.