JAL weighing bankruptcy
28 Dec 2009
Debt-ridden Japan Airlines Corp may consider liquidation as an option in its restructuring plan. Enterprise Turnaround Initiative Corp (ETIC), which has been overseeing JAL's reconstruction, is discussing the possibility with JAL's creditors.
The Japanese carrier, headed for its fourth annual loss in five years, also has plans to lay off employees and reduce routes for economic viability.
It has also sent out letters to past employees to seek approval to reduce pension benefits.
ETIC has also submitted an alternative proposal that includes the option of a debt waiver of more than 200 billion yen by JAL's creditor banks, including the state-owned Development Bank of Japan, reports quoting sources said.
ETIC is the fund established by the Japanese government to revive companies that are backed by government loans.
American Airlines and Delta Air Lines had, meanwhile, evinced interest in acquiring minority stakes in JAL, one of Asia's largest carriers, looking to utilise vast JAL's network in Asia. (See: Battle for JAL: American Airlines ups the ante to $1.1 billion)
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