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. Last Updated: 07/27/2016

All Nippon Airways Unveils Sweeping Revamp Plan

TOKYO -- Ailing carrier All Nippon Airways Co. Ltd. on Monday unveiled a sweeping four-year restructuring program, including plans to sharply cut its work force and interest-bearing debts.

"In the past year, the business environment surrounding us deteriorated faster than the speed of our existing restructuring plans," ANA President Kichisaburo Nomura told a news conference.

"In order to become a strong, global airline, it is necessary for us to clearly present our corporate vision and take substantial action."

Japan's second-largest airline said it will slash its total consolidated debt, including lease-related debt, to 1.28 trillion yen ($10.5 billion), down by 20 percent or 320 billion yen, over the four years to March 2003.

ANA intends to trim its group work force by 10 percent to about 25,200 and set up a holding company during the same period.

It also aims to set up a discount, mostly international airline out of Kansai International Airport in Osaka, western Japan, by 2000-01.

ANA depends on domestic routes for 70 percent of its total sales, while its subsidiary Air Nippon Co Ltd handles mostly short-distance flights between local cities.

Last week the company posted an 88.8 percent year-on-year decline in parent-only current profits for the year to March 31, largely due to a domestic price war. Current profit is pretax and includes gains and losses on securities investments and non-operating activities.

Last year, two new airlines joined the Japanese market, which had been dominated by three major airlines - Japan Airlines Co Ltd, Japan Air System Co Ltd and ANA - for 35 years.

ANA's rival Japan Airlines saw its parent-only current profits more than quadruple for 1998/99, however, largely because 63 percent of its sales come from international operations.

ANA is forecasting a current loss this business year for the first time in nearly three decades amid expectations of slow sales on its new international flights and continued intense competition at home.

Analysts have said ANA needs to withdraw from its overseas hotel businesses and unprofitable routes, as well as reduce its employees and interest-bearing debt, to turn itself around.