Ailing Japan Airlines requests government bailout
Japan Airlines, Asia`s largest carrier, said Thursday it was seeking an injection of emergency funds by the government to help it through its financial difficulties.
Tokyo: Japan Airlines, Asia`s largest carrier, said Thursday it was seeking an injection of emergency funds by the government to help it through its financial difficulties.
JAL, which lost more than one billion dollars in the April-June quarter, has asked for another public bailout to boost its capital base, its president Haruka Nishimatsu told reporters after talks with the transport minister.
"Ultimately we think that the use of more funds will reduce our debts to the public," he said, without disclosing how much the airline had requested.
Investors dumped JAL stock as worries mounted about its future, with the share price plunging 15.8 percent to close at 144 yen.
JAL, which has already received three government bailouts since 2001, announced last week plans to slash 6,800 jobs and pursue a tie-up with a foreign carrier as part of efforts to return to profit.
Local media have also reported that a break-up of the company is a possibility, but Nishimatsu said he did not support such a move because it would drive customers away.
"If we were to take that kind of approach, we would not be able to revive what can be revived," he said.
According to the Nikkei business daily, JAL`s creditors -- including the state-backed Development Bank of Japan -- are calling for its healthy operations to be split from the money-losing segments.
Japan`s new centre-left government has said that it would overhaul the restructuring process set in motion for JAL under the previous government, but has ruled out allowing it to collapse.
Nishimatsu said he had proposed additional restructuring measures, including personnel cost reductions, in his talks with Transport Minister Seiji Maehara, who is overseeing the restructuring process.
JAL has forecast a net loss of 63 billion yen (690 million dollars) in the year to March 2010, after a 63.2-billion-yen deficit last year.
The carrier is reportedly considering abolishing 50 loss-making routes.
Nishimatsu said last week that JAL aimed to seal a tie-up with an overseas carrier by mid-October, without naming any potential partners.
According to local media, Delta Air Lines is considering taking a stake in JAL to help it through its financial difficulties.
American Airlines, British Airways and Qantas are also reported to have made a joint offer of assistance, while European carrier Air France-KLM is seen as another possible partner.
Delta and Air France-KLM are part of the SkyTeam global airline alliance, while JAL, American Airlines, British Airways and Qantas belong to the rival Oneworld grouping.