October 29, 2009
Loss-making carrier Japan Airlines has confirmed it is to apply for financial assistance from a newly-formed state-backed turnaround agency.
Japan Airlines said it had started negotiations with the Enterprise Turnaround Initiative Corporation.
Enterprise Turnaround Initiative Corporation has access to up to 1.6 trillion yen of government guaranteed funds, but it remains to be seen how much JAL may be given.
Japan Airlines reported a loss of 99bn yen between April and June.
Thursday’s announcement comes a month after the airline first said it would need state aid.
Hit by falling passenger numbers and high oil prices, the firm has been in severe financial trouble for some time, and its debts are said to total $15bn.
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The airline recently announced plans to cut 6,800 jobs to save money.
The Enterprise Turnaround Initiative Corporation has been given the power to buy the debt of companies in trouble, and send in turnaround specialists to help them restructure their operations.
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