Japan Airlines Corporation files for bankruptcy with 25.4 billion U.S. dollars in debt and will seek
to revive itself under a state-backed restructuring plan.
Japan Airlines Corporation said on Tuesday it had filed for bankruptcy with 2.3 trillion yen or 25.4 billion U.S.
dollars in debt as of the end of September, as the company seeks to revive itself under a state-backed
restructuring plan.
The Enterprise Turnaround Initiative Corporation of Japan or ETIC, a fund that can draw on government-backed
funding to bail out ailing firms, has said it will support the carrier.
Japan Airlines Corporation's board voted to file for bankruptcy protection earlier in the day, a move that will see
it slash 15,000 jobs and replace aging planes to survive an industry beset by volatile fuel costs and fickle fliers.
All board members also voted to resign. JAL officials were not immediately available for comment.
The Japanese government said it would do everything to ensure the airline continues its operations.
Sources have said JAL, Asia's largest airline by revenues, will remain in the skies under a state-backed
restructuring plan but will cut unprofitable routes, non-core businesses and pension payouts and as it tries to
free itself from about 16 billion U.S. dollars in debt.
JAL, which has been bailed out by the Japanese government three times in the past 10 years, must now look to
reinvent itself through painful operational cuts and tough decisions about foreign capital and alliances.
With a market value of about 150 million U.S. dollars, JAL is now smaller than minor carriers such as Croatia
Airlines and Jazeera Airways, and is worth less than a Boeing 747.
JAL is expected to file for protection from creditors using a procedure that will allow it to continue operations and
seek to rebuild itself, similar to Chapter 11 in the United States.
In return, the state-backed ETIC will support the carrier with about 300 billion yen in capital and creditors will be
asked to forgive about 350 billion yen of loans. - Thai-ASEAN News Network