Troubled Japan Airlines has submitted a plan for reorganization that includes the elimination of jobs, retirement of aircraft and, of all things, the possibility of creating a low-cost version of itself.

As many as 16,000 employees at Japan Airlines could be out of work after the airline submitted a reorganization plan that will dramatically cut the airline's fleet and over 40 international and domestic routes.

JAL was bailed out by the Japanese government in January and is currently undergoing a restructuring that will allow the airline to emerge leaner and financially stronger by 2013. In order to do so, the airline will retire up to 103 aircraft including all its Boeing 747-400 and Airbus A300-600 jets it owns by March 2011, and will stop operating all its McDonnell Douglas-built MD81 and MD90 aircraft by a later date, according to Reuters. This will reduce the types of aircraft the airline operates to just four. Back in April, 2010, the airline announced it would axe flights between Tokyo's Narita Airport and Sao Paulo, Milan, Rome, Brisbane, Bali and Honolulu as well as Kansai to Hong Kong, Beijing and Bangkok.

Would a low-cost solution work? Seeing the rise of Qantas subsidiary Jetstar and the success of other low-cost airlines in the region, JAL will probably consider creating a new airline or linking up with a low-cost counterpart. The Telegraph reports that JAL is also seeking anti-trust immunity with oneworld^® partner American Airlines to form a joint venture across the Pacific, further cementing Asia's role as a critical focus for the three global airline alliances. Not to be outdone, All Nippon Airways (ANA), a competitor to JAL, has already announced plans to set up a discount carrier, feeding a low-fare airline frenzy that shows little sign of subsiding. ANA already plays a key role in the Star Alliance, providing links to Asia from Japan for airline powerhouses like United, which is looking to merge with Continental Airlines (also of the Star Alliance) to form the world's largest carrier.

The Asia-Pacific region is bustling with airline activity as companies position themselves to thrive in a yet-to-be-defined airline future. Thai Airways and Tiger Airways, which is partially owned by Singapore Airlines, recently announced plans to launch a new budget carrier. Jetstar and AirAsia announced a strategic partnership in June that will have the two budget carriers share resources in an effort to cut costs and streamline operations. Malaysia's long-haul, low-cost airline AirAsia X is planning to add to its London service by adding Paris in late 2011. Australia's Virgin Blue Group (parent of Virgin Blue and V Australia) and Etihad Airways plan to link flights between Australia and Abu Dhabi in 2011.

The International Air Transport Association (IATA) announced this year that the Asia-Pacific region has overtaken North America as the world's largest aviation market. It's no surprise that the most airline business activity we are seeing happens to involve this region. With the lines blurred between traditional definitions of budget airlines and those yet to evolve, the next incarnation of the business of commercial aviation could very well find its roots here.