Japan Airlines Corp., Asia's largest carrier by sales, plans to eliminate 2,140 jobs at its main international unit to shed costs as the global recession damps demand for overseas travel.

Japan Airlines International Co. will cut 13 percent of its staff by the end of March 2011, reducing the unit's headcount to 14,100 from 16,240 at the end of last month, spokesman Stephen Pearlman said in an interview on Jan. 8, 2009. Some jobs will move to other parts of the company, while 1,640 will be dropped, he said.

The airline is shrinking its workforce and retiring its older, less fuel efficient planes after losing money in two of the past three years. The carrier plans to slash labor costs by a further 10 billion yen (US$109 million) after shedding 52 billion yen last fiscal year through workforce reductions and by lowering bonus payments and retirement benefits.

"With the way the market is now, it's more important than ever for Japan Airlines to cut costs," said Masayuki Kubota, who oversees the equivalent of US$1.7 billion in assets in Tokyo at Daiwa SB Investments Ltd. "It's difficult for anyone to predict when these severe conditions will change."

The decrease in headcount will also be achieved through attrition, Pearlman said. Workers will not be fired, he said.

Worst Since 2003

The airline is also shifting flights to its JALways and JAL Express units to lower costs making some jobs unnecessary, Pearlman said. Worldwide air travel may fall this year, according to the International Air Transport Association (IATA).

The carrier fell 1 percent to 208 yen at the end of trading on the Tokyo Stock Exchange on Jan. 8, 2009. It slid 17 percent last year.

The airline had its biggest monthly drop in overseas passengers in five years in September flying 17.1 percent fewer passengers overseas as the Japanese economy fell into recession.

Japanese wages declined 1.9 percent in November, the most in four years, underscoring a record low in the country's consumer sentiment.

Japan Airlines, commonly known as JAL, plans to cut 400 jobs this fiscal year to reduce its staff to 48,800 after axing 2,297 jobs last fiscal year. Pearlman declined to say how its overall headcount will be affected by reductions at the international unit or how much it will save the company.

JAL plans to increase the share of international flights flown by JAL Express and JALways to 38 percent by the end of March 2011, compared with 25 percent at the end of March 2008, it said in February. Some Chinese flights will be shifted from the international unit to JAL Express from next fiscal year, Pearlman said.

In November, the airline slashed its operating income forecast by 44 percent to 28 billion yen for the year ending Mar. 31, compared with a previous forecast of 50 billion yen, as it flies fewer passengers. JAL had a profit last fiscal year after two years of losses totaling 64 billion yen.