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14-Oct-2009 10:58 AM

Japan Airlines seeking billions in restructuring aid

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.