world of aviation logo

JAL enters bankruptcy protection

written by WOFA | January 20, 2010
photo - Paul Sadler
photo - Paul Sadler

Up to 15,000 employees of Japan Air Lines face an uncertain future after the ailing carrier was placed into bankruptcy protection on January 19 as part of ongoing efforts to restructure the loss-making carrier.

The Japanese carrier entered bankruptcy with listed debts of JPY2.3 trillion (A$27.4bn), but will keep operating with the support of a JPY1 trillion (A$12bn) line of credit from the state-sponsored Enterprise Turnaround Initiative Corporation of Japan. Most shareholders are expected to see a significant loss in value, while it is understood that large amounts of debt will be forgiven.

JAL is expected to use the bankruptcy filing to slim down significantly, with mass redundancies and network reductions expected to take place within the next year. However, the airline and the oneworld alliance have said that there will be no immediate changes to services as a result of the bankruptcy.

Meanwhile, media reports from Japan claim that JAL has chosen a proposal from US carrier Delta Air Lines for an equity and operational alliance which could see it exit the oneworld alliance in favour of the Delta-led Skyteam alliance. American Airlines and oneworld have also proposed an assistance package for JAL, which could include Qantas assisting JAL to establish its own low cost carrier. Despite the reports, JAL has not yet announced which proposal it intends to accept.


Each day, our subscribers are more informed with the right information.

SIGN UP to the Australian Aviation magazine for high-quality news and features for just $99.95 per year