How a Buddhist monk turned CEO revived Japan Airlines from bankruptcy
[Source: https://www.channelnewsasia.com/news/cnainsider/buddhist-monk-ceo-kazuo-inamori-save-japan-airlines-jal-bankrupt-11033866 ]
It was the world’s top-performing airline in both passenger and cargo transport for five straight years in the 1980s, culminating in the largest fleet of Boeing 747s the industry had ever seen.
Even before that, Japan Airlines (JAL) was to its nation what Singapore Airlines has been for the Republic: Flagship carrier and emblem of good service.
But then it became a textbook example of what could go wrong in an airline.
When JAL was state-owned and insulated from real-world pressures by its government overseers, it had picked up some bad habits. After privatisation, it lacked the instinct for survival in the open market and the experience required to handle sudden turbulence.
Lurching from one self-inflicted problem to another, and then rocked by a string of global events, it took a nosedive less than a decade ago with debts of ¥2.32 trillion (S$28 billion), more than 100 times its valuation.
JAL grounded more than 100 jets and trimmed almost 50 routes after filing for bankruptcy protection.
The company grounded more than 100 jets and trimmed almost 50 loss-making routes after it filed for bankruptcy protection.
Its bankruptcy in 2010 was the largest in Japan outside the financial industry. Its saviour was 77-year-old retiree and ordained Buddhist monk Kazuo Inamori, who became its chief executive officer and chairman with no previous experience in the aviation industry.
Divine intervention or otherwise, he performed a miracle in making JAL the world’s most profitable airline within two years.
The story of one of the biggest corporate turnarounds in Japan’s history is told in Inside the Storm, a series about how major companies are run in high-pressure situations and how they adapt in times of crisis to compete better.