November 10, 2009
Struggling Japan Airlines is set to receive an emergency loan from a state-backed lender to help it to keep flying in the face of heavy losses, the government said on Tuesday.
JAL will get the financial lifeline from the Development Bank of Japan (DBJ), Transport Minister Seiji Maehara told a news conference, adding that the amount and timing of the loan had not yet been decided.
“My expectation is that it will initially be without a government guarantee,” he said.
Japan’s creditor banks have reportedly been asking for such assurances to be attached to emergency credit lines.
Cash-strapped JAL urgently needs about 200 billion yen (2.2 billion dollars) in emergency financing, according to Japanese media.
The group is also seeking an injection of public funds to boost its capital as it restructures under the supervision of a government-backed corporate revival body.
The carrier — the recipient of three such government bailouts since 2001 — lost more than one billion dollars in the April-June quarter and plans thousands of job cuts and a drastic reduction in routes.
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The airline said Monday its executives would receive no pay in December as the struggling carrier needs to cut costs.
JAL president Haruka Nishimatsu is also reportedly ready to step down to take responsibility for the financial troubles.
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