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Airline Experiences Heavy Loss

Japan Airlines asks government for bailout

Sep 26, 2009

JAL president Haruka Nishimatsu made a request for a government bailout after meeting Japan's new transport minister. He also proposed a more drastic restructuring.

The airline recently announced plans to cut 6,800 jobs as one means to survival.

JAL's shares had already tumbled 18 percent to a record low on rumors that it was seeking public money or that it might seek to break up the company.

"Ultimately, we think that the use of more funds will reduce our debts to the public," Mr. Nishimatsu said. He made the comments to reporters after meeting Transport Minister Seiji Maehara, who took over the role after the Democratic Party took charge of the government.

Mr. Nishimatsu plans to apply for public funds under the industrial revitalization law. The law means companies need to obtain approval from the government to restructure. They can then apply for loans from banks, which are backed by the Japanese government's wholly-owned Japan Finance Corp.

Media reports have said that several US and European airlines - including Air France-KLM, Delta Airlines and American Airlines - are in the running to take a stake in JAL and expand into Asia via code-sharing agreements.

Mr. Nishimatsu said last week he hoped JAL would have a deal in place with an international carrier by the middle of October.

Japan Airlines asks government for bailout
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