Per - Aviation Week
Troubled JAL seeks government bailout
Friday September 25, 2009 var era_rc = { ERADomain: 'atwonline.firstlightera.com' };
Japan Airlines President Haruka Nishimatsu yesterday asked Seiji Maehara, Japan's new transport minister, for a government bailout, conceding that even a cash infusion from a foreign investor likely won't be enough to keep the troubled carrier afloat.
Nishimatsu declined to say how much capital JAL is seeking from the government when talking to reporters following a meeting with Maehara. The carrier, which lost ¥99 billion ($1.09 billion) in its fiscal first quarter ended June 30, received government-backed loans from the Development Bank of Japan totaling around ¥100 billion in June and is in talks with American Airlines and Delta Air Lines about one of them potentially taking a stake
(ATWOnline, Sept. 21).
The
Financial Times, citing sources familiar with the situation, said JAL needs another ¥100 billion to maintain operations through early 2010 and ultimately hopes to raise more than ¥225 billion in new capital and loans. It previously announced a restructuring plan cutting 14% of its workforce, or nearly 6,800 jobs, over the next three years while eliminating 50 routes, with a heavy emphasis on international reductions.
But following his meeting with the JAL president, Maehara told reporters that he's "not convinced" the company's restructuring plan will work. "I'm skeptical about the feasibility of JAL's rehabilitation plan, so at this stage I have yet to say whether the government will inject public funds in JAL," he said. He added that he will consult with Prime Minister Yukio Hatoyama and plans to reach a decision "as soon as possible."
He rejected the notion that the government would take over JAL or force it to break up into smaller parts. "We are not considering anything other than for JAL to rebuild on its own," he said. Nishimatsu noted that JAL may need to revise its restructuring plan, possibly making deeper cuts, to secure government help.
by Aaron Karp