December 29: Ailing Japan Airlines (JAL) is struggling with $16 billion of debt, reports the BBC. Recent Japanese press reports suggest the struggling airline may have to file for bankruptcy, which send shares in JAL tumbling yesterday.
According to the report, Japanese Finance Minister Hirohisa Fujii has said that the state would not give the airline any more loans, the airline having been bailed out four times since 2001. JAL is in talks with American Airlines and Delta about mergers, but bankruptcy would complicate any deals being considered.
JAL recently announced short-term reduction in capacity on five international routes in an effort to save cash with flight frequency on two international routes – Tokyo (Narita) to Sao Paulo via New York, and Tokyo (Narita) to Shanghai – reduced between January and March, 2010. Aircraft have also been ‘downsized’ on three international routes between Tokyo, Beijing and Hong Kong for a similar length of time.
A state-backed fund, the Enterprise Turnaround Initiative Corporation, is due to determine in January if it can assist JAL, but was “considering a bankruptcy filing as part of the restructuring plan”, says the report.