Japan’s transport minister said yesterday he will not force struggling Japan Airlines, Asia’s biggest airline, into bankruptcy.
“We will not crush and liquidate [the airline],” Land, Infrastructure and Transport Minister Seiji Maehara said on a TV Asahi talk show yesterday. “It’s just impossible.”
A team of government-appointed corporate turnaround experts was set up on Friday to create a restructuring plan for the airline, whose own draft reconstruction plan the transport minister called “insufficient.”
The team will make a recommendation to the transport minister by late next month or early November.
Maehara also said government spending to build airports helped erode the profitability of Japan Airlines, known as JAL, and promised to review the allocations.
“This special account was used to create a system for building unprofitable airports, forcing Japan Air to pay landing fees,” Maehara said.
The airline incurred its biggest-ever quarterly net loss of ¥99 billion (US$1 billion) in the three months to June, and has forecast a net loss of ¥63 billion for the current fiscal year to next March. JAL was privatized in 1987.
JAL has sought public funds for survival.
Its request for taxpayer money came months after it received ¥60 billion in loans from the government-owned Development Bank of Japan in June.
In his meeting on Thursday with the transport minister, JAL president Haruka Nishimatsu revealed that the airline is short ¥450 billion yen through March 2011, money that is needed for debt repayment, media reports said. Nishimatsu reportedly told Maehara that JAL was planning to cover part of the payment by selling off its in-flight meal catering unit and reviewing company pension plans.
JAL’s original restructuring scheme also included 6,800 job cuts, or around 14 percent of its workers.
The airline has reportedly been in talks on financial tie-ups with several top airlines including Delta Air Lines Inc, American Airlines Inc and Air France-KLM.
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