Airline Post » japan airlines

Japan Airlines goes bankrupt?

Stewart — Tue, 19 Jan 2010 09:30:50 +0000

Japan Airlines, Asia’s biggest airline, will file for bankruptcy protection today, shortly after Tokyo’s Stock Exchanges closing time.

Japan Airlines currently has debts estimated from $16 to $22 billion. The officials intend to cut over 15,700 jobs (about 30% of the staff) by March 2013, to close some routes and to introduce smaller aircraft on marginal routes.

The speculations about JAL’s trials have been very intense in the last months. Although some representatives of the Japanese Government say that the airline could recover in two years, although the analysts say that this seems like a very optimistic goal.

Japan Airlines stock price collapsed in the last days, losing more than 90 percent of its value. This morning, the shares of the company were trading at just $0,04 per share, a record low. JAL’s market value is now just $120 million, below the price of just one new Boeing 787 jet.

Once the proud of the country, Japan Airlines was set up in 1951 with a several leased aircraft and it grew into a corporate giant with almost 50,000 staff and a fleet of 280 planes. JAL continued to refuse to cut the costs and the investments ever since the first signs of Japan’s economic bubble collapse, in the early 1990s.

Delta & Japan Airlines to join the Far East Alliance

Abbey — Mon, 23 Nov 2009 13:57:52 +0000

The Sky Team grouping of airlines that is headed by Delta Air Lines volunteered a helping hand to Japan Airlines (JAL) which equals to $1bn (£600m). According to Delta, cash assets were proffered to Japan Airlines in case it quitted from the One World Alliance where American Airlines was the member of it.

It became known that Japan Airlines were looking for a financial support from the Japanese government which was considered to be the fourth attempt since 2001.

Delta is looking forward to enlarge its direction to Japan which means the company wants JAL to become the part of SkyTeam’s Far East alliance. Korean Air and China southern are the members of SkyTeam’s Far East alliance. Making a merger with JAL, Delta will have a good opportunity to expand routes between the US and Japan.

The Sky Team made an offer to Japan Airlines according to which the team was able to purchase shares of JAL for the amount of $500m. Moreover, $300m will be given to JAL as a guarantee to cover all losses connected with the leaving the One World alliance, $200m in asset backing and $20m to cover expenses of Japan Airlines for changing alliances.

As for JAL, the company decided not to comment on the offer. Lately it was reported by Japan Airlines that the company lost 32.3bn yen ($357m; £214m) during July to September period while it was estimated that it had 40.1bn yen profit a year earlier.

Right now, Japan Airlines is trying to find a way to pay off $15bn of debts and a big pension deficit. The company is also struggling with falling passenger numbers as result of the economical recession.

Asia’s largest airline cuts pensions to avoid bankruptcy

TC — Mon, 09 Nov 2009 12:51:41 +0000

Asia’s largest airline is threatened to file bankruptcy unless 9,000 former employees are forced to have their payouts cut. This is a result of JPY330 billion yen (USD$3.6 billion) loss that the company suffered in March.

JAL President Haruka Nishimatsu made a plea to the company’s pension fund in May for payments to be reduced by more than half, and the airline has already factored an JPY88 billion gain from the move into its profit forecasts for this financial year.

JAL said last week it would ask for aid from a state-backed turnaround fund. It could receive a large injection of public money from the fund if it can secure the backing of creditors and come up with a viable restructuring plan.

These proposals have triggered strong opposition from retirees and employees, who under current laws can easily block any cuts to their benefits if just one third of them vote against.

To get around this, the government is considering legislation that would allow JAL to cut payouts, but implementation would be tricky as it could be interpreted as violating a constitutional protection of personal property rights.

A bankruptcy would likely cause more pain for creditors, which include the state-owned Development Bank of Japan and the country’s top three private banks. The task force has estimated creditors could recover just 2-3 percent of their loans in bankruptcy, as opposed to 20-30 percent if the restructuring were out of court.

Five years after retiring from Japan Airlines, former pilot Tsutomu Watanabe is fighting to protect the pension he was promised but that the airline can no longer afford to pay.

My pension contract is settled and I have my certificate, said the 65-year old Watanabe.

A website set up by Watanabe and other JAL retirees shows that more than 40 percent of 9,000 people receiving and in line to receive benefits have signed an online petition against pension cuts, which puts them above the one-third threshold.

Japan Airlines to cut 13,000 jobs

Dave — Tue, 27 Oct 2009 13:50:49 +0000

According to recent news, Japan Airlines (JAL) is going through some hard times due to the economical downturn and is planning a restructuring. As a result, the company will cut 13,000 jobs by 2015, a number considerably bigger than previously announced. Thus, the working force after the layoffs will reach about 35,000 and the number of subsidiaries will be cut from 120 to 50.

Most of the job cuts will take place at Japan Airlines International Co., which operates all JAL flights, according to Kyodo News.

The additional job cuts (4,000 more than it was announced) will involve the sale of equity stakes in JAL Hotels Co. and consolidating subsidiaries from abroad of the JALPAK Co. travel agency.

JAL also made a formal request to banks to write off or convert their $2.7 billion in loans into equity, as a plan to return profitability to the company. The plan for the restructuring is to be released at the end of the month.

Japan Airlines requesting bail-out

Dave — Thu, 24 Sep 2009 09:08:21 +0000

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)