JAL set for bailout

Japan Air Lines may receive a government backed bridging loan to allow it to restructure.

“The government team will do its best to take steps to ensure safe and stable operations of the airline,” transport minister Seiji Maehara told Japanese reporters on October 30.

JAL is understood to be seeking a JPY180bn (A$2.2bn) bridging loan from the state-owned Development Bank of Japan, which is already the airline’s biggest creditor, as a stopgap until it can secure further funds from the Enterprise Turnaround Initiative Corporation.

JAL reported a net loss of JPY99bn (A$1.2bn) for the three months to June, and is forecast to record a net loss of JPY63bn (A$766m) for the financial year ending March 2010. It is also estimated to have debts of JPY1.35 trillion (A$16bn).

JAL has also recently been involved in talks with Delta Air Lines and American Airlines on competing proposals for an equity and operational alliance.