Minister to head Government team formed to oversee JAL restructure
Japan Transport Minister, Seiji Maehara, will head a new team overseeing the restructuring of Japan Airlines Corp (JAL) as the carrier seeks its fourth state bailout since 2001 (Kyodo News/Xinhu/Bloomberg/Reuters/The Yomiuri Shimbun/The Asahi Shimbun/Japan Times, 30-31-Oct-2009). The team, which also includes officials from departments including the Finance Ministry, Justice Ministry and the Cabinet Office, met for the first time on 30-Oct-2009, and will consider such issues as giving government guarantees on JAL loans and reducing the cost of pensions for JAL employees. The team may also opt to inject public money into the carrier. The Japanese Government stated it would be involved in the JAL rehabilitation as “JAL operates 60% of the flights in the skies over this country”.
JAL, which has applied for funds from the state-affiliated Enterprise Turnaround Initiative Corp, is headed for a fourth consecutive loss in five years on a plunge in international travel. The carrier reportedly has excess liabilities of JPY250 billion (USD2.7 billion) and requires approximately JPY200 billion (USD2.2 billion) in cash by the end of Nov-2009 to remain operational (Asahi Shimbun, 30-Oct-2009). JAL is also believed to need to bolster its capital by JPY300 billion (USD3.3 billion) by Mar-2010.
Meanwhile, JAL's main rival, ANA, has announced its own near term strategy (below).
Japan Government: “We formed the team to do the utmost to ensure smooth operations during the reorganization. We will look at every angle in cooperation with the ministries,” Seiji Maehara, Transport Minister. Source: Bloomberg, 30-Oct-2009.