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January 19, 2010    

Japan Airlines files for bankruptcy

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by Kay Murchie

As expected, Japan Airlines (JAL) has today filed for bankruptcy protection.

The airline, which is Asia’s biggest carrier, has been struggling amid the global economic downturn and has been grappling with a mountain of debts of around $16.5 billion (£10 billion).

The Japanese Government has said that flights will operate as normal and the airline will now begin its restructure under the watchful eye of the state-backed turnaround body (the Enterprise Turnaround Initiative Corp of Japan).

According to Japanese media, all board members have voted to resign and around 15,600 jobs are expected to be lost.

Yesterday, shares fell to a fresh low of 5 yen, having fallen as low as 3 yen. JAL has lost more than 90% of its market capitalisation since the beginning of January.

Shares in the carrier will now be delisted on 20 February, according to the Tokyo Stock Exchange.

The collapse of the airline will be seen as Japan’s biggest corporate failure outside the banking sector.

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