My Account Menu

CAPA Login

Register to trial CAPA Membership!

Japan Airlines seeking billions in restructuring aid

14-Oct-2009 10:58 AM

Japan Airlines has reportedly drafted its new turnaround plan, to be presented to Transport Minister, Seiji Maehara, by the end of the month (Kyodo/Reuters/AFP/Bloomberg, 13/14-Oct-2009). Details reportedly include:

  • Debt waiver: Reportedly seeking a JPY250-300 billion (USD2.8-3.3 billion) debt waiver through debt forgiveness and debt-for-equity swaps. The carrier is reportedly making arrangements with the Japan Government and its main creditor banks, with details to be finalised in Nov-2009;
  • Fresh loans and capital: Reportedly seeking another JPY150-300 billion (USD1.8-3.3 billion) in fresh loans and capital. Most of the loans would reportedly be guaranteed by the State, with private and public funding to be sought;
  • Job cuts: To reportedly expand its job cuts from the previously stated 6,800 to more than 9,000 group employees (20% of the total);
  • Pension-related liabilities: Currently has pension-related liabilities of approximately JPY330 billion (USD3.7 billion), which the carrier reportedly plans to reduce to JPY100 billion (USD1.1 billion);
  • International partners: JAL has officially put on hold separate talks with Delta Air Lines and American Airlines for a capital infusion and business ties, aiming to focus first on its own revival plan, although reports suggest informal talks are continuing;
  • CEO: JAL denied reports CEO, Haruka Nishimatsu, will step down under the restructuring plan. [more - Perspective]

Japan Government: "The assessment of assets and the compilation of the rehabilitation plan are going more smoothly than expected….[the reorganisation is likely to] solve many problems," Seiji Maehara, Transport Minister. Source: AFP, 13-Oct-2009.