Japanese Government to bailout JAL

| October 19, 2009 | 0 Comments
Japanese Government to bailout JAL

Asia’s largest carrier, Japan Airlines (JAL), is set to be bailed out by the Government after a restructuring plan was rejected by its creditor banks.

The airline, like many others throughout the world, 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 63 billion yen for the fiscal year ending March.

Last month, the International Air Transport Association (IATA) said major airlines continue to suffer amid higher fuel prices.

According to the industry group, losses across the whole industry for the 2009 year could amount to £6.86 billion ($11 billion).

In the meantime, the loss-making airline saw its shares soar 11% following the news of the bailout.

However, last week, the group lost around 25% of its value as fears grew about the airline’s future.

The carrier recently unveiled plans to reduce headcount by almost 7,000 in a bid to save money after making a loss of 99 billion yen (£672 million) during the April to June period.

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