Japan’s transport minister: JAL will not be forced into bankruptcy
TOKYO — Japan's transport minister said Sunday he will not force the struggling Japan Airlines, Asia's biggest airline, into bankruptcy.
TOKYO — Japan’s transport minister said Sunday he will not force the struggling Japan Airlines, Asia’s biggest airline, into bankruptcy.
“We will not crush and liquidate (the airline),” Land, Infrastructure and Transport Minister Seiji Maehara said on a TV Asahi talk show. “It’s just impossible.”
A team of government-appointed corporate turnaround experts was set up Friday to create a restructuring plan for the airline, whose own draft reconstruction plan Maehara called “insufficient.”
The team will make a recommendation to the transport minister by late October or early November.
Officials from the airline and the transport ministry were not available for comment Sunday.
The airline incurred its biggest-ever quarterly net loss of 99 billion yen ($1 billion) in the three months to June, and has forecast a net loss of 63 billion yen ($701 million) for the current fiscal year to March 2010. JAL was privatized in 1987.
JAL has sought public funds for survival. Its request for taxpayer money came months after it received 60 billion yen ($668 million) in loans from the government-owned Development Bank of Japan in June.
In his meeting Thursday with the transport minister, JAL President Haruka Nishimatsu revealed that the airline is short 450 billion yen ($5 billion) through March 2011, money that is needed for debt repayment, according to media reports. Nishimatsu reportedly told Maehara that JAL was planning to cover part of the payment by selling off its in-flight meal catering unit and reviewing company pension plans.
JAL’s original restructuring scheme also included 6,800 job cuts, or around 14 percent of its workers.
The airline has reportedly been in talks on financial tie-ups with several top airlines including Delta Air Lines Inc., the world’s biggest airline operator, its rival American Airlines Inc. and Air France-KLM, Europe’s biggest airline group.