American Airlines goes for bankruptcy, Japan Airlines comes out of it

It is a story of two major carriers of their respective countries, and also of the world, way of handling the crisis. These are the studies in contrast. While it is true that there have been different reasons for their debacle, what is noteworthy is how these were dealt with. Let us first take the case of JAL. Not long ago, JAL was facing the prospects of bankruptcy due to higher levels of inefficiencies and an indifferent attitude towards the customers. The resultant high costs and the loss of passengers began to hurt the airline so much that it was preparing for bankruptcy. However, with the change of the guard at the highest level, there was a change of the management practices which brought in cost reduction, higher efficiencies in work methods and greater accountability. All through there was the government support to these initiatives. An interesting aspect of this turnaround was that the tendency to offer the cheap air tickets to attract more customers was avoided. Rather, upscaling of the cheap international flights and domestic flights was done to make this turnaround possible.

On the other side of the globe, in the USA, the American Airlines has been fighting the high levels of competition, pilot sickness instances and delays due to mechanical issues. While some experts believe that the pilot sickness is a major factor ever since the AA began imposing new work terms which reduced their earnings. However, some other experts point out to the historical data and argue that the sickness levels are in line with the historical trends and the problem of delays and cancellations is more due to the mechanical issues. Whatever be the reason, the problem has become so enormous that it has filed for bankruptcy and issued layoff notices to a number of its employees.

These two instances show the two extremes in the life of an airline. The Indian carrier Kingfisher seems to be straddled in between the two extremes. On one hand, it does not want to file for bankruptcy and at the other it is not willing to gain sufficient capital infusion from any quarter. The result is the continuation of the woes.

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