Japan Airlines requesting bail-out
by Dave on 24/09/09 at 11:08 am
Strongly hit by the economical recession, Japan Airlines (JAL) asked the government for a bail-out to help them survive. The company’s president, Haruka Nishimatsu, also proposed a drastic restructuring of its operations after meeting with Japan’s minister of transportation. Reorganization already started as Japan Airlines cut 6,800 jobs.
The news was not well received by the company’s investors – its shares dropped a staggering 18% to a record low. Mr. Nishimatsu said after meeting Transport Minister Seiji Maehara that they plan to apply for public funds under the industrial revitalisation law. This means that companies need approval from the government to restructure and can apply for loans at banks backed by the Government.
“Ultimately, we think that the use of more funds will reduce our debts to the public,” Mr Nishimatsu said.
JAL president also said that they hope to strike a deal with an international carrier by the middle of October. Bail-out might not be JAL’s only option as several US and European carriers such as Air France-KLM, Delta Airlines and American Airlines are interested in taking a part of the company in order to expand into Asia.
Japan Airlines is not the only company hit by the global downturn; a few weeks ago, the Slovakian low-cost company, SkyEurope announced bankruptcy and left hundreds of passengers stranded. The International Air Transport Association (IATA) predicts losses of up to $11bn for 2009 across the airline industry. For the Asia-Pacific region, the estimates losses of $3.6bn for 2009. (via BBC)
You might also be interested in:
Bogdan Obretin
Sep 24th, 2009
RT @AirlinePost: Japan Airlines requesting bail-out to survive http://bit.ly/4aGIiR