Global Airport News

Global Airport News

Japan Airlines will terminate a 10-year-old information technology partnership with IBM Japan, as part of its cost-cutting efforts, the Nikkei business daily reported.

The airline might buy IBM Japan's 51 percent stake in JAL Information Technology for billions of yen to take charge of business planning duties at the company and have more control of system development, the paper said.

The high costs associated with developing proprietary systems through the joint venture have weighed on JAL's earnings, the Nikkei said.

JAL's group workforce is likely to increase by around 1,000 if JAL Information Technology becomes a subsidiary, but the airline expects to save tens of billions of yen in costs over the long haul, the paper reported.

However, JAL is unlikely to alter its goal of cutting around 16,000 jobs in fiscal 2010, the daily said.

Though the main lenders are concerned that the move could hamper JAL's streamlining efforts, the airline would seek their understanding by playing up the savings expected from such measures as adopting standard software and outsourcing operations, the Nikkei said.

The airline, now rebuilding after having filed for bankruptcy protection earlier this year, will include these cost-cutting measures in a rehabilitation plan being crafted.