Japan Air Lines is seeking a bailout from the Japanese government, raising the prospect that the airline will be forced to make major cuts to its network to survive.
JAL chief executive Haruka Nishimatsu is understood to have met with new Transport Minister Seiji Maehara and requested that the government make a capital injection into the troubled airline. While Maehara has stated that he does not want to see JAL fail, he told reporters that the government still has reservations about the airline’s restructuring plans. “I have doubts about the feasibility of JAL’s restructuring plan. So I was not in the position to say yes about the request in the meeting,” he said.
JAL is seeking JPY250bn (A$3.16bn) in debt and equity to meet its debt obligations and allow it to see through the current downturn in longhaul premium travel which has hit the carrier hard. As a result, the carrier has been involved in talks with Skyteam carrier Delta Air Lines and oneworld carriers American Airlines and British Airways on possible equity and operational alliances, which are expected to focus on the key Tokyo-Narita hub operations of the carriers. Qantas recently denied that it had been involved in formal merger talks with JAL.
According to Japanese media, JAL has drawn up a list of 50 routes which it intends to cut over the next three years. While the majority of cuts appear to be on routes from Osaka-Kansai airport, the list includes its Tokyo-Brisbane service, which will reportedly be cut in its 2010/2011 financial year