Project Haruhi
19Jan/104

Japan Airlines files for bankruptcy

JAL Bankruptcy

Itsuo Inouye / AP

After citing debts of approximately 2.3 trillion yen (@ 25 Billion U.S.D.). J.A.L. Asia's largest airline filed for the Japanese version of a U.S. Chapter 11 Bankruptcy Tuesday morning J.S.T.(Japan Standard Time). Job cuts of more than 15,700 and discontinuation of 30 unprofitable routes are part of the deal struck with the Japanese government as part of the Enterprise Turnaround Initiative Corp of Japan (ETIC) take over of the company.

J.A.L.'s market value is reportedly less than the cost of a Boeing 747 ($150 Million U.S.D.) it's reported that the shareholders will be wiped out and that lenders will forgive about 730 billion yen in debt.

This is the third time in the past ten years that the Japanese government has bailed out J.A.L however this time the current board is required to resign and the E.T.I.C. plans to take the company to profitability by 2013.

In this economic environment, I wish them well...

JAL's Statement of Intent

MSNBC coverage

The Guardian UK coverage

About Shamisen

Shamisen is the site owner, administrator, and basically the guy responsible for keeping this place running. His interests include aviation and anime. He is perpetually in a strange mood…

  • From the Guardian UK article:

    “The airline will halve its subsidiaries, which include a hotel chain and credit card business, to give itself a fighting chance of recovery amid falling passenger numbers and volatile fuel prices.

    Its first obvious break with the past was the appointment of Kazuo Inamori, the founder of the electrical components maker Kyocera, as chief executive.

    A very different airline is expected to emerge under the stewardship of the 77-year-old Inamori, a trained Buddhist monk and self-confessed airline industry novice. Reports said it would have to retire 53 of its largest jets and replace them with smaller aircraft suited to domestic and regional flights.

    JAL will also have to decide over rival offers of investment from two US airlines keen to boost their presence in east Asia,

    American Airlines and its partners, including British Airways, say they are willing to invest $1.4bn (£850m) to keep JAL as part of their Oneworld alliance. But reports suggest JAL is preparing to accept a rival offer worth about $1bn from Delta and defect to its Sky Team group.

    Delta estimates a switch to Sky Team would increase JAL’s revenues by $400m a year and give the two airlines a 43% share of the market between Japan and North America.”

    A novice airline CEO and Delta looking at adding J.A.L. to its recent acquisition of Northwest.

    The next months could be interesting..

  • From the Guardian UK article:

    “The airline will halve its subsidiaries, which include a hotel chain and credit card business, to give itself a fighting chance of recovery amid falling passenger numbers and volatile fuel prices.

    Its first obvious break with the past was the appointment of Kazuo Inamori, the founder of the electrical components maker Kyocera, as chief executive.

    A very different airline is expected to emerge under the stewardship of the 77-year-old Inamori, a trained Buddhist monk and self-confessed airline industry novice. Reports said it would have to retire 53 of its largest jets and replace them with smaller aircraft suited to domestic and regional flights.

    JAL will also have to decide over rival offers of investment from two US airlines keen to boost their presence in east Asia,

    American Airlines and its partners, including British Airways, say they are willing to invest $1.4bn (£850m) to keep JAL as part of their Oneworld alliance. But reports suggest JAL is preparing to accept a rival offer worth about $1bn from Delta and defect to its Sky Team group.

    Delta estimates a switch to Sky Team would increase JAL’s revenues by $400m a year and give the two airlines a 43% share of the market between Japan and North America.”

    A novice airline CEO and Delta looking at adding J.A.L. to its recent acquisition of Northwest.

    The next months could be interesting..

  • that definitely sucks… its happening everywere nowadays

  • that definitely sucks… its happening everywere nowadays