Air China's - Orient Aviation

COVER STORYlong been a fact of life at theairline. The difference thistime was the machinationsbecame public, leaked tothe media by a dissatisfiedexecutive.In simple terms, it involveda group of middle managersand a few senior executivesand board members unhappywith the way Shinmachi washandling the airline’s woes,including the way he tackledthe issue of wage cuts.The CEO-designate isconfident the issue will disappear.He believes it is a“demographic problem”arising from the fact that in theyears prior to 1975 JAL took‘ We have been ableto shake hands orreach an agreementwith the majority ofthe unions [on 10%pay cuts for twoyears]’in great numbers of highly qualified collegegraduates. In the years that followed, afterthe company re-evaluated its employmentpractices, JAL cut back significantly on thenumber of people it hired.Nishimatsu believes that when there is alarge number of people who have served thesame length of time in a company, there isbound to be factionalism as they competewith each other for promotion.But after 1975, he said, there were fewerpeople recruited and this reduced the capacityfor factionalism and sectionalism“I am considered one of the fairly younggeneration and the fact I am now cominginto a position of responsibility showswe are entering a new agewhere there isn’t going tobe that kind of sectionalismor factionalism as before. Ithink we are all going to betoo busy working to worryabout politics.”He is determined to improvecom munications withinthe company and empowermiddle level managers tomake decisions on the spot.Many big Japanese firmsare hierarchical, top-downcorporations. JAL is unusualin that it has traditionally been“a rather bottom-up kind ofcompany”, said Nishimatsu.Never theless, he hasfelt in recent years therehas been a dilution of thisculture. “I think because itwas originally there, it is inthe corporate DNA, or in thefoundations of our corporateculture. I believe that as longas top management is verycareful to let it thrive againwe will be able to bring thisbottom-up culture back veryeasily,” he said.Given he can restore unityin the ranks, the new businessplan is a blueprint for a returnto financial stability. Whereit differs from previous‘ I cannot think ofenough words todescribe how importantChina is [to us]’medium-term plans is that it covers a fiveyearperiod to the end of the 2010 financialyear. Normally, these plans cover threeyears.This longer period is to cater for a criticaldevelopment; an expansion of Tokyo’s Hanedaairport. Normally a domestic facility, in 2009it will open a fourth runway, increasingcapacity by about 43% to 407,000 departuresand arrivals. About 25% of the new slots willbe for international flights.While the airport authority has made nodecisions on slot allocation, JAL believesthere will be a change of approach by them.Previously, when new capacity becameavailable, most slots were handed out to newcarriers to encourage their development.Some concentrated solely on profitableroutes “skimming the cream off the top ofthe business”, said the CEO-elect. Networkcarriers such as JAL focusednot only on highly profitableroutes, but flights that wereconvenient to the consumer,he said.With the expansion ofHaneda a different approachis being considered. Therewill be greater considerationgiven to the routes an airlinewill offer if granted extraslots and the benefits thesedecisions will provide forpassengers. The end result,according to Nishimatsu, willbe that JAL will have a hugeCAREER TRACKPerhaps fittingly, Japan Airlines’ president and CEOdesignate,Haruka Nishimatsu, grew up below one of theworld’s busiest flight paths.He was born in 1948 in Hamamatsu, Shizuoka Prefecture,midway between Tokyo and Osaka. His parents ran a clothingfactory making school uniforms. “I adored aircraft. I have watchedplanes fly over Hamamatsu between Tokyo and Osaka since I wasa small boy and was fascinated by them,” he told Orient Aviationin Tokyo.It was that early fascination with airlines which ultimatelymotivated him to join JAL shortly after graduating from TokyoUniversity with a degree in theoretical economics (microeconomics).Nishimatsu was interested in working in the international arenaand JAL seemed a logical place to go. “In those days JAL was thejob seeker’s number one choice.” His first job was in the flight crewtraining department preparing schedules for pilot trainees.In 1974 he had his first taste of the airline’s finance departmentand in 1976 he procured funds from the U.S. Export Import Bankfor the purchase of JAL’s DC-10 fleet. “I felt some nostalgia attheir retirement from service last year,” he said.While finance was to become Nishimatsu’s specialist area,along the way he spent time in the traffic division and in corporateplanning and industrial relations. In 1987, he was transferred toJAL’s Frankfurt office, the only time he has worked outside Tokyo,as administration manager of sales and airport offices.Four years later, he returned to Tokyo and for the next 14 years herapidly rose through the JAL senior financial ranks, becoming seniorvice-president of JAL’s financial department in June last year.Married with one son and one daughter, his favourite pastimeis golf although he only manages about 10 rounds a year. He alsolikes reading, particularly history books.36 ORIENT AVIATION MAY 2006