I chose couple of articles. This is because the reason why Japan Airline, JAL, went bankruptcy was similar to the reason why Pan Am went bankruptcy. Furthermore, comparing there two, there is a big difference between these two.
First of all, JAL went bankrupt in 2010. There were a couple of reasons. First was bad management, especially political interference. For example, politicians asked JAL to set unprofitable routes. In addition, labor union was too strong, and it was veto against management. Thus, if the management tried to cut benefits, the union did not agree with the opinion. Thirdly, JAL purchased a lot of Boeing 747, however this aircraft was not energy efficient. Consequently, fuel expenses had bad effect on management. Finally, Leman Shock was the trigger to bankruptcy. JAL unfortunately was not able to recover revenue as it used to be.
On the other hand, Pan Am went bankruptcy. The reason was as follows. Firstly, the top management was not able to develop its policy in order to adopt “deregulation in 1978.” Certainly, it merged with National Airline, but it did not create synergy. Secondly, since oil shock, oil price increased and fuel expenses raise sharply. In addition, labor union was too strong, and it continuously rejected offers by the management. Especially, although the management intend to cut salaries in order to make Pan Am cost efficient, it could not help but abandoning its strategy. Thirdly, Pan Am purchased more Boeing 747 than it needed. As a result, high running cost let Pan Am struggle to generate profits.
So far, comparing JAL and Pan Am, it turned out that both JAL and Pan Am got losses and their losses did not decrease but accumulated. Finally, both of them went bankruptcy. However, final breath was totally different. While JAL succeeded in revival, Pan Am never returned. What is difference? The answer is government protection. JAL was forced to shut it down by the government. The government appointed new chair person. On the other hand, Pan Am asked Delta Airline to support. Nevertheless, stockholders of Delta Airline rejected this idea. Thus, Pan Am abandoned its dream. By the way, how JAL revived?
Since bankruptcy, JAL has done its best, and it becomes one of the profitable carriers all over the world. The key is new chairperson, Kazuo Inamori. He had a clear vision. In specific, he created new mission statement and tried to convince board members, his subordinates, other employees in the office, and even other front line workers to share it. Nowadays, all employees understand and have mission statement with them in their pockets. Additionally, he introduced new way of accounting, which is called as “Ameba Management.” In this way, each department, section, front line etc. record every financial items by themselves in order to review its financial statement immediately. This way allowed JAL employees to think about revenue and cost by far more carefully than they used to be.
To summarize, both Pan Am and JAL experienced bankruptcy from similar reasons; severe environment, expenses, management, labor union, and fixed assets. However, government protection and new chairperson saved JAL, whereas Pan Am was waked out by Delta.
http://www.bbc.co.uk/news/business-20293487