JAL Shares Fall Again As Bankruptcy Worries Mount

[Gerald A]

Shares of Japan Airlines dropped by 32 percent to a record low on Wednesday on growing expectations the struggling carrier was headed for bankruptcy under a state restructuring plan.




http://news.airwise.com/story/view/1262172787.html

[Ryan N]

Japan Airlines may stop international flights: report
December 31, 2009 - 8:54PM

Japan Airlines (JAL) may stop flying international routes under a plan being discussed by the government to try to keep the debt-ridden company in the air, a report said Thursday.

The plan calls for rival All Nippon Airways (ANA) to take over JAL's international flights as part of what would be a drastic downsizing scheme for Asia's biggest airline, the Mainichi Shimbun newspaper said.

The scheme was apparently on the table when key cabinet officials, including Transport Minister Seiji Maehara, met on Wednesday to discuss JAL's rehabilitation programme.

The transport ministry has strongly opposed the plan to turn JAL into a domestic carrier despite growing calls for a drastic restructuring of its international operations where losses weigh heavily, the newspaper said.

"(JAL) will be a good company if it abandons international routes and concentrates on domestic flights," an unnamed JAL executive was quoted by Mainichi as saying.

Immediate confirmation of the report was not available.

In a related move, Maehara held talks with vice Prime Minister Naoto Kan and other officials Thursday and agreed that the state-run Development Bank of Japan will offer further loans to JAL.

The DBJ has already disbursed just over half of a 100 billion yen (1.08 billion dollar) credit line extended in November. "On top of the remaining 45 billion yen, (DBJ) is to expand the limit," Maehara told reporters.

Cabinet officials said they would discuss details of further loans to JAL on Sunday before making an official announcement, while local media reported that DBJ is likely to double its credit line to 200 billion yen in total.

JAL, battered by the global recession and swine flu pandemic, is scrambling to slash costs and is seeking its fourth government bailout since 2001 to keep flying in the face of mounting losses.

Shares plunged to a record low on Wednesday as media reports that bankruptcy is one option for the cash-strapped carrier spooked investors.

The Tokyo stock market was closed for a holiday on Thursday.

Local media have reported that the state-backed Enterprise Turnaround Initiative Corp., which is overseeing JAL's restructuring, is considering the possibility of the carrier filing for protection from creditors.

It has also been offered financial assistance by both American Airlines and Delta Air Lines, who are competing to take a minority stake in the Japanese carrier, eyeing its coveted Asian landing slots.

JAL, which lost about 1.5 billion US dollars in the six months to September, has said it plans thousands of job cuts and a drastic reduction in routes as part of its efforts to return to profitability.

The global economic downturn has dealt a heavy blow to JAL's efforts to recover from a long period of financial turbulence stretching back to its privatisation more than two decades ago.© 2009 AFP

[D Chan]

it's hard to comprehend their ability to survive in the long term if they give up international flying

[Marty H]

Looks like a desicion will be made on a $1B offer for a tie up with Delta on the 16th of Jan, AA and BA also seem to have offers on the table and hope JAL stays with the One world alliance rather than switch to Skyteam.

http://www.theaustralian.com.au/business/aviation/japan-airlines-favours-delta-rescue-british-airways-american-airlines-wait-in-wings/story-e6frg95x-1225816203376

[Mike W]

^ It's a big hole for One World in Asia if they lose (which looks likely if they go with DL) JAL. Both the economic powerhouses of Japan and Korea would be Star and Sky.

[Marty H]

By the read of this if something isnt done shortly JAL will be grounded

http://www.news.com.au/business/last-ditch-bid-to-keep-jal-flying/story-e6frfm1i-1225818596702

[Nick G]

Planning on booking flights to Japan......and the threat of bankruptcy means we won't be flying JAL.....

[Gerald A]

Japan Airlines Set To File For Bankruptcy



Japan Airlines is expected to file for one of the country's largest ever bankruptcies on Tuesday, marking the failure of the former state-owned carrier that was once a symbol of Japan's international aspirations.

JAL, Asia's largest airline by revenues, will remain in the skies under a state-backed restructuring plan as it tries to free itself from about USD$16 billion in debt in exchange for slashing its workforce by a third and shedding unprofitable routes, sources have said.




http://news.airwise.com/story/view/1263843153.html

[Brendon I.]

Just received this email from JAL.


Japan Airlines: Important company information 19 January 2010

To all our valued customers,

This is to confirm that Japan Airlines is now receiving the support of the Enterprise Turnaround Initiative Corporation of Japan.And to speed up the revitalization, JAL has filed for protection at the Tokyo District Court under Japan's Corporate Reconstruction Law. As a result of these actions, JAL has secured the funding needed to maintain uninterrupted business operations and to meet the debt service obligations going forward. In addition, all JAL frequent flyer programs remain fully in effect.

JAL Group airline companies will continue to provide safe, reliable air travel services to customers worldwide. Existing JAL Group carriertickets and reservations,including those for codeshare flights and connecting flights operated by other carriers,remain valid and in effect, and new reservations are being accepted and processed normally.Complimentary coupons issued to shareholders are valid until the original expiry dates and can be used as before.

JAL Mileage Bank services remain unchanged, and customer mileage credits remain fully valid. Mileage can continue to be accumulated or redeemed for awards as in the past, and previously redeemed awards retain their full value.JAL Mileage Bank services will also continue to be offered to all JMB members and JALCARD holders.

JALCARD, JALPAK, JALTOURS, JAL HOTELS and other group companies remain unaffected by recent events and are fully operational.

We would like to express our deepest apologies for the worry caused by the financial situation of JAL and seek your continued patronage and support of JAL and the JAL group companies.

Sincerely yours,

Japan Airlines

For further information http://www.jal.co.jp/en/other/info2010_0119_overseas.html

[Gerald A]

Embraer, Mitsubishi May Get Boost From JAL Woes



Embraer and Mitsubishi Heavy could see an uptick in business from Japan Airlines as the bankrupt carrier rejigs its fleet towards smaller and more fuel-efficient aircraft.

JAL, which filed for bankruptcy protection on Tuesday as part of a state-led restructuring, plans to retire all of its 37 Boeing 747-400 jumbo jets and all 16 McDonnell Douglas MD-90 planes and buy smaller aircraft to take their place.




http://news.airwise.com/story/view/1263949713.html

[Justin L]

This excerpt from a USA Today article (http://www.usatoday.com/travel/flights/2010-01-19-japan-airlines-bankruptcy-restructuring_N.htm):

More than 30 travel routes are expected to be cut during JAL's three-year restructuring. Matsumoto expects the airline to pare unprofitable routes between Japan and Europe, as well as Japan and North America.

The airline may also trim flights into Brisbane and Sydney, Australia, as part of the bankruptcy proceedings, Russell Shaw, an analyst for financial firm Macquarie, wrote to clients last week.

[James Smith]

The Tokyo/Brisbane route was already earmarked for planned suspension in 2010/11 so there may only be the Sydney left route to trim! It will be interesting to see if VA shows interest in Japan.

[NickN]

Jetstar/Qantas will be licking their lips if JAL pulls out of Brisbane/Sydney or reduces flights.

[Dan Collins]

Just been reading this morning that JAL have decided (or been persuaded) to stay with the oneworld alliance. Being a bit of a oneworld fan this is good news :)

I thought this link was quite good showing the many CEO's of oneworld airlines supporting JAL's decision etc: http://aviationblog.dallasnews.com/archives/2010/02/oneworld-sings-glad-tidings-ab.html

Dan

[Montague S]

our friends at the financially troubled JAL have decided to quit BNE after 24 years of outstanding, Asian, service.

http://www.theaustralian.com.au/business/aviation/return-hoped-for-by-brisbane-airport-as-jal-cuts-back/story-e6frg95x-1225860342747