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January 19, 2010    

Bankruptcy protection imminent for Japan Airlines

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by Kay Murchie
Bankruptcy protection imminent for Japan Airlines

Japan Airlines (JAL) is expected to file for bankruptcy protection today in a move that will see the loss of 15,000 jobs at Asia’s largest carrier.

Shares in the troubled airline have been plummeting over recent days as a bankruptcy filing seemed unavoidable.

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.

Like many other airlines, it has been struggling amid the global economic downturn which has led to a slump in demand.

The carrier is now worth just $150 million and is struggling with a mountain of debts of around $16.5 billion (£10 billion).

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

According to the BBC, banks will have to write off unsecured debt and the airline will receive an injection of taxpayers’ money.

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