Tweet
Japan Airlines Corp filed for bankruptcy protection on Tuesday owing more than $25 billion, and vowed to slash 15,700 jobs in an effort to survive in an industry hit by volatile fuel costs and fickle flyers.
JAL, Asia's largest airline by revenues, will remain in the skies thanks to nearly 1 trillion yen ($11 billion) in support from a state-backed fund and must go through a sweeping restructuring under a new board and management.
Shareholders will be wiped out and lenders will forgive a larger-than-expected 730 billion yen in debt as part of the deal with the fund, the Enterprise Turnaround Initiative Corp of Japan (ETIC).
Bankruptcy will only be the beginning for an airline with depleted capital, facing headwinds such as rising fuel prices and shrinking passenger numbers, on top of hefty restructuring costs.
JAL, which has now been bailed out by the Japanese government four times in the past 10 years, will cut 31 routes and replace many of its older and less fuel-efficient planes. It also faces tough decisions about foreign capital and alliances.
Shares of JAL, which have fallen more than 90 percent since the start of the month, closed flat at 5 yen after trading down 2 yen to 3 yen. They will be delisted on February 20, according to the stock exchange.
JAL, Asia's largest airline by revenues, will remain in the skies thanks to nearly 1 trillion yen ($11 billion) in support from a state-backed fund and must go through a sweeping restructuring under a new board and management.
Shareholders will be wiped out and lenders will forgive a larger-than-expected 730 billion yen in debt as part of the deal with the fund, the Enterprise Turnaround Initiative Corp of Japan (ETIC).
Bankruptcy will only be the beginning for an airline with depleted capital, facing headwinds such as rising fuel prices and shrinking passenger numbers, on top of hefty restructuring costs.
JAL, which has now been bailed out by the Japanese government four times in the past 10 years, will cut 31 routes and replace many of its older and less fuel-efficient planes. It also faces tough decisions about foreign capital and alliances.
Shares of JAL, which have fallen more than 90 percent since the start of the month, closed flat at 5 yen after trading down 2 yen to 3 yen. They will be delisted on February 20, according to the stock exchange.