Money-losing Japan Airlines Corp (JAL) is considering raising ¥250 billion (US$2.8 billion) from financial institutions and others including Delta Air Lines Inc under a major restructuring plan, a newspaper said yesterday.
JAL is to announce its management improvement plan by the end of the month.
Under the plan, JAL hopes to raise ¥250 billion, Japan’s Nikkei Shimbun said yesterday, citing no sources. JAL will seek capital from banks, investment funds and others including Delta, the world’s biggest airline operator, the paper said.
Officials at JAL could not be reached for comment yesterday. The company said in a statement on Saturday it was aware of reports on tie-ups between JAL and foreign carriers, but said nothing has been decided.
Hit by plummeting demand amid a slumping global economy and swine flu fears, JAL incurred its biggest-ever quarterly net loss of ¥99 billion in the three months to June.
Delta is in preliminary discussions about buying a stake in JAL for about US$300 million. The U.S. airline giant could become a leading shareholder in JAL and get coveted access to Haneda Airport, close to Tokyo’s business district, a person briefed on the Delta situation said.
The Nikkei said Delta has offered to invest as much as ¥50 billion, which would give it a 11.2 percent stake in JAL.
Delta’s rival American Airlines is also negotiating a possible investment, according to a person familiar with the talks. American would like to form a joint business venture with JAL, in which the two carriers would seek antitrust immunity to work closely in setting schedules and prices for service around the world, according to the person, who spoke on Saturday on condition of anonymity because of the sensitive nature of the talks.
JAL is also in talks with Air France-KLM, Europe’s biggest airline group, over a capital tie-up, Japan’s top-selling newspaper the Yomiuri Shimbun, reported Saturday.
JAL has forecast a net loss of ¥63 billion for the fiscal year to next March and plans to cut the number of flights and slash costs by ¥53 billion during the current fiscal year and another ¥100 billion in the next fiscal year.
The Nikkei said JAL would cut 4,700 jobs equal to about 10 percent of its group work force under the restructuring plan. The airline will also sell subsidiaries and assets to raise capital.