Tokyo: Japan Airlines Corp, which is seeking a state bailout, won't give annual forecasts when it reports its earnings on Friday due to uncertain business conditions, the Nikkei business daily said.
Saddled with $15 billion in debt, a massive pension deficit and dozens of unprofitable flight routes, JAL is now seeking its fourth state bailout since 2001 from the Enterprise Turnaround Initiative Corp, a government-backed turnaround fund.
JAL, Asia's largest carrier by revenue, is due to announce its April-September results at 4:30 p.m.. But it plans not to give its latest annual projections, which it has provided in the past when announcing half-year results, the Nikkei said.
Jiji news agency said the struggling carrier was likely to widen its operating loss forecast to 200 billion yen for the year to next March as passenger demand has fallen sharply in the wake of the global economic slowdown.
JAL had previously projected a group operating loss of 59 billion yen for the year to next March. That compares with a 90 billion yen loss consensus from Thomson Reuters I/B/E/S.
JAL said in a statement that those reports did not come from the company.
Japan's government has pledged to enlist a state bank to offer bridge loans to prevent the carrier from running short of cash and keep the airline afloat.
American Airlines Corp and Delta Air Lines have shown an interest in taking a minority stake in JAL to access JAL's Asian network and get a stronger foothold in Japan.
But analysts have said capital injections or additional financing alone won't improve the carrier's prospects due to its severely under-funded pension systems.
JAL President Haruka Nishimatsu met with the leaders of JAL retirees' associations on Thursday to seek their approval on pension payout reductions.
Media reports said the leaders expressed their wish to cooperate in some way to save the airline, but many retirees are expected to strongly oppose having their pension payments cut.
JAL's shares, which have nearly halved since the start of this year, advanced 0.9 percent to 108 yen. The benchmark Nikkei 225 average shed 0.5 percent.
Bureau Report
First Published: Friday, November 13, 2009, 13:28