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…