JAL gets emergency loan OK from state
By Mari Yamaguchi |
November 25, 2009, Wednesday
|
Print Edition
Print Edition
JAPAN Airlines said yesterday that it obtained government approval to receive up to US$1.1 billion in emergency loans aimed at preventing the money-losing company from grounding flights.
JAL signed an agreement with the state-run Development Bank of Japan after receiving government approval, a company official said on condition of anonymity.
Asia's largest airline has pressed for a government bailout and considered massive job cuts and other restructuring steps to avoid collapse. JAL shares tumbled 8.4 percent to a record low yesterday amid worries over a possible bankruptcy.
The transport ministry authorized the airline's application for the loans after confirming that "an event which would interfere with our flight operations could occur," in which "convenience for users and corporate activities would be significantly affected."
The airline signed a loan arrangement yesterday for an undisclosed amount with the Development Bank of Japan for "funds necessary for continuance of our flight operations."
It also obtained government approval for separate loans of 25 billion yen (US$282.2 million) for necessary aircraft imports.
Struggling JAL booked US$1.5 billion in losses in the first half of the fiscal year and faces interest-bearing debt totaling nearly US$10 billion.
Last week, Delta Air Lines and its alliance partners said a billion-dollar offer was on the table to lure JAL from its affiliation with American Airlines.
JAL President Haruka Nishimatsu has said he will make a decision on the offer by the end of the year.
On Monday, the airline asked retired workers to accept a 30 percent cut in pension benefits.
JAL signed an agreement with the state-run Development Bank of Japan after receiving government approval, a company official said on condition of anonymity.
Asia's largest airline has pressed for a government bailout and considered massive job cuts and other restructuring steps to avoid collapse. JAL shares tumbled 8.4 percent to a record low yesterday amid worries over a possible bankruptcy.
The transport ministry authorized the airline's application for the loans after confirming that "an event which would interfere with our flight operations could occur," in which "convenience for users and corporate activities would be significantly affected."
The airline signed a loan arrangement yesterday for an undisclosed amount with the Development Bank of Japan for "funds necessary for continuance of our flight operations."
It also obtained government approval for separate loans of 25 billion yen (US$282.2 million) for necessary aircraft imports.
Struggling JAL booked US$1.5 billion in losses in the first half of the fiscal year and faces interest-bearing debt totaling nearly US$10 billion.
Last week, Delta Air Lines and its alliance partners said a billion-dollar offer was on the table to lure JAL from its affiliation with American Airlines.
JAL President Haruka Nishimatsu has said he will make a decision on the offer by the end of the year.
On Monday, the airline asked retired workers to accept a 30 percent cut in pension benefits.
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