Japan Airlines to File for Bankruptcy
Struggling Japan Airlines Corp. could file for bankruptcy as early as Jan. 19 under a government-backed restructuring plan that includes 13,000 job cuts, reports said Saturday.
Saddled with massive losses, Asia’s biggest airline is seeking a state bailout. On Friday, the government approved a court-led bankruptcy option proposed by a state-backed corporate turnaround body, the business newspaper Nikkei said, citing no sources.
With government approval, the airline, known as JAL, could file for bankruptcy with the Tokyo District Court as early as Jan. 19, it said.
The national newspaper Asahi also said JAL’s bankruptcy filing could come Jan. 19.
A JAL spokeswoman said the company was still in discussions about restructuring plans, but regardless of the decision, JAL’s flight operations will continue.
Officials at the transport ministry could not be reached for comment.
The Nikkei said JAL will cut 13,000 jobs — nearly 30 percent of its work force — over the next three years and withdraw from nearly 50 routes at home and abroad.
In a bid to ease JAL’s debt burden, the corporate turnaround body will ask banks to forgive 350 billion yen ($3.8 billion) of debt owed by the troubled airline, it said.
Amid bankruptcy fears, shares in JAL continued to drop, with their closing price tumbling nearly 12 percent Friday to 67 yen. At the beginning of 2009, JAL’s share price stood at 213 yen.
JAL is also weighing cash offers from Delta Air Lines Inc., the world’s biggest airline operator, and its rival American Airlines. The U.S. carriers are fighting over JAL because of its strong routes in the fast-growing Asian market, especially China.
Delta and its SkyTeam partners have offered $1 billion to JAL, while American Airlines has countered with a $1.4 billion offer. JAL and American Airlines are in the oneworld alliance, which also includes British Airways.