Struggling Japan Airlines receives 100bn yen bailout

| June 22, 2009 | 1 Comment
”Struggling

Japan Airlines (JAL) is set to receive up to 100 billion yen (£635 million, $1 billion) in Government aid.

JAL, which is Asia‘s biggest carrier, will receive the emergency loan on the condition that the airline’s management improves and the way in which the company is run.

Earlier this year, the airline predicted an annual loss of 34 billion yen as, along with many other airlines, it has been struggling amid the economic downturn which put many airlines out of business last year.

The airline has also introduced a series of job cuts, plans for fuel-efficiency, as well as a focus on business customers.

Meanwhile, the loan will come from the state-backed Development Bank of Japan (DBJ), via Kaoru Yosano, the finance minister, who said Government support for JAL would encourage commercial banks to lend to the airline.

In related news over the weekend, Sir Richard Branson, founder of Virgin Atlantic, urging ministers not to step in and bail out British Airways (BA).

BA admitted earlier this month that it is “fighting for survival” and last month, reported a pre-tax loss of £401 million for the 12 months to the end of March, compared with profits of £922 million the previous year. The loss represented the biggest since the company was privatised in 1987.

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  1. Carol says:

    Although the airline industry as a whole is suffering, it’s no surprise that JAL and its ancient marketing plan that focuses on serving age 50+ xenophobic Japanese male executives is suffering under the current conditions. Having worked tt the Americas headquarters in California, I had a ringside seat to the waste, wrongheadedness and arrogant dullness that prevades a corporation that has had to sell its Tokyo headquarters and suffered a boardroom attempted coup.

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