Struggling Japan Airlines seeks Government funding
Struggling Japan Airlines (JAL) has confirmed it has asked the Government for public funds to strengthen its capital base and save it from collapse.
The news comes just a week after the loss-making carrier announced plans to cut its operating schedule and reduce headcount by almost 7,000.
JAL president, Haruka Nishimatsu, said he is also proposing a major restructure after meeting with Transport Minister Seiji Maehara to discuss ways of reviving the struggling airline.
However, the amount required by the airline has not been disclosed.
Shares in the airline are currently at a record low following last week’s news of the job losses and rumours that it is looking to break up the company.
There has been speculation that several US and European airlines are in the running to take a stake in the airline.
There have also been reports suggesting that discussions are taking place with Delta Airlines and American Airlines to invest in JAL to expand into Asia via code-sharing agreements, while there was further speculation that Air France-KLM had joined the talks.
JAL, like many others, is struggling to stay afloat during the global economic downturn which has led to a slump in demand. Many airlines have been forced out of business as fewer people are travelling by air.
However, JAL has also been affected by the outbreak of swine flu and the airline is predicting a net loss of Y63 billion for the fiscal year ending March.
Earlier this month, the International Air Transport Association (IATA) said major airlines continue to suffer amid higher fuel prices.
According to the industry group, in the first six months of the year, airlines are likely to have lost £3.7 billion.
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