JAL to file for bankruptcy?

[HKPAX]

JAL shares plunge to record low
12-01-2010

Shares in Japan Airlines have plunged 45 percent to a record low in Tokyo trading, on speculation that the carrier will file for bankruptcy. The move will likely wipe out the investments of many people, including 1.6 million small shareholders. The cash-strapped airline has been bailed out at least three times over the past nine years.

......quoted from Hong Kong news service - link below. The Sunday Torygraph had an article saying this would be unhelpful to BA, presumably because BA and JAL are in the same alliance (along with Cathy Pathetic).

Any views? Me not a journo.

RTHK English News (http://www.rthk.org.hk/rthk/news/englishnews/news.htm?main&20100112&56&639870)

[concorde007]

I think it's high time they file bankruptcy or look for investors to sell the airline.:bored:

[Spooky 2]

Does anybody have a feel for the number of contract expats at JAL these days? I would suppose if JAL wihdrew from the international markets many of these jobs would be in jepordy.

[flyhigh744]

I thought the Japanese government gave JAL 300 million?

I remember reading something of that sort a few days ago on Yahoo News

[Dysag]

The traveling public doesn't need JAL... nor Alitalia, nor British Airways.

If they go under another carrier will pick up the demand.

On worse terms & conditions, no doubt...

.. but only for the overpaid employees..

The paying customers should rejoice.

[ab33t]

The government has given them loads of money over many years

[rfp172]

They have 50 unfilled orders; 10 738, 5 773ER and 35 788 so watch that stock too

[Miles Magister]

I had heard that many of their troubles have been caused by their government making them invest in unrealistic infrastructure to support the government's policies, such as the new airport between Tokyo and Osaka.

If this is so then the government should support them.

MM

[hetfield]

Should I buy some shares?

[vapilot2004]

This goes back to the folly that was a 'house' of cards on Wall Street that spread round the world when it all fell down in a sort of domino effect, global Ponzi scheme.

[taupo2tahoe]

Does anybody have a feel for the number of contract expats at JAL these days? I would suppose if JAL wihdrew from the international markets many of these jobs would be in jepordy.


The last of the expat flight deck crews were "unceremoniously dumped" early last year after having given JAL 50 years (IASCO) of safe and productive service. I don't think there will be a lot of sympathy from the last 140 crewmembers who were given the boot from the Hawaii base in March. It was OK while it lasted but the JAL management had no clue, couldn't adapt to the changes in the industry and carried on, business as usual, as if they were still in the heydays of the '70's and 80's.
Carry on with the tea ceremony.

[Robin Pilot]

Looks my my boss has been charged with getting them sorted out:

http://mdn.mainichi.jp/mdnnews/business/news/20100114p2a00m0na007000c.html (http://mdn.mainichi.jp/mdnnews/business/news/20100114p2a00m0na007000c.html)

Hope that helps your discussion. If not - apologies for a waste of pixels :)

[Bigmosquito]

JAL will make announcement on the 19th of this month. Looks more a restructuring than anything else.

Look at this FLightglobal post:

JAL to slash workforce and sell non-core assets (http://www.flightglobal.com/articles/2010/01/12/336994/jal-to-slash-workforce-and-sell-non-core-assets.html)

Bigmosquito.

[EagleStar]

January 13th、2010
Present Strategy of Our Support Plan for Japan Airline
Please be informed that Enterprise Turnaround Initiative Corporation (hereafter ETIC), a
quasi sovereign turnaround fund, is in process of forming a business revitalization plan to
support Japan Airline, in which we intend to ensure all of its business operations on and off
the grounds to be performed smoothly without any interruption as usual with sufficient
amount of capital. The followings are planned to be included in the said plan.
(1) All the credits related to the regular business are to be protected. i.e.) No change is to
take place in the payments related with these credits
(2) No influence over the usage of the flight tickets. i.e.) All the flight tickets are to be used
as usual including changes, refunds and etc.
(3) The leasing fees under the Aircraft Leasing agreements are to be paid as usual.
(4) No changes on “frequent flyer mileage”. i.e.) It can be used as usual.
(5) Flight coupons issued for the shareholders are valid until the original maturity dates.
Thank you.
Enterprise Turnaround Initiative Corporation of Japan

[WHBM]

Would this pending insolvent be the same Japan Air Lines who have in recent days taken considerable time from the executives of (in particular) American Airlines and Delta Airlines, all running across to Tokyo to court JAL to a) oh do stay in the OneWorld Alliance, please, and b) oh do come and join us in the SkyTeam Alliance, please.

Are JAL fiddling while Rome burns ? Do the execs of these two USA majors have no idea of what is going on ?

[de Payen]

Excuse my ignorance but how will this affect ANA? Aren't they a subsidiary of or owned by JAL?

Hughes

[Brenoch]

I suppose they'll be jumping up and down for a bit.

[Martin VanNostrum]

ANA (All Nippon Airways) has nothing to do with JAL. They are completly separate companies.

[sb_sfo]

Delta wasn't invited to start this, but once they did, it would be negligent of AA to stand by while DL tried to poach a oneworld partner.

[leemind]

It just popped up on Bloomberg (a news service)

*Japan Airlines decides to file for Bankruptcy, Hirano says

07:33 GMT

[Cyrano]

Would this pending insolvent be the same Japan Air Lines who have in recent days taken considerable time from the executives of (in particular) American Airlines and Delta Airlines, all running across to Tokyo to court JAL to a) oh do stay in the OneWorld Alliance, please, and b) oh do come and join us in the SkyTeam Alliance, please.

Are JAL fiddling while Rome burns ? Do the execs of these two USA majors have no idea of what is going on ?

Actually they have a very good idea of what's going on. Delta and partners have already offered $1bn in investment as a sweetener to induce JAL to switch alliances (the sort of money that could be helpful to accelerate an exit from a Chapter-11-style bankruptcy) and AA and team have countered with a reported $1.4bn. Now not all of the money is necessarily in cash - some is in that odd currency known as "synergies" - but you can be assured that the suitors are very aware of JAL's position.

[raffele]

It just popped up on Bloomberg (a news service)

*Japan Airlines decides to file for Bankruptcy, Hirano says

07:33 GMT

Indeed: BBC News - Japan Airlines files for bankruptcy protection (http://news.bbc.co.uk/1/hi/business/8466997.stm)

[PAXboy]

The involvement of One World and SkyTeam is fascinating. I think this is the first time a major carrier in a global alliance has come up for grabs? I expect that we shall see OW and ST in hot pursuit.

As everyone knows, the airlines of the future will be these super carriers where the central operation is run by the alliance and the individual carriers are contract suppliers. The economies of scale are almost beyond words.

[Brenoch]

Wasn't Swissair up for grabs or was it a done deal when they went bust?

[EagleStar]

Japan Airlines (JAL) formally applied today for support for corporate restructuring. In response, the Enterprise Turnaround Initiative Corporation of Japan (ETIC), a government–backed corporate turnaround body entrusted with JAL's revival, confirmed today that they will provide support.

As a result, JAL will also be able to obtain sufficient financing from the Development Bank of Japan and ETIC to ensure the continuation of flight operations. Furthermore, customers' airline tickets and frequent flyer miles will be fully protected and JAL's frequent flyer program is expected to continue as normal.

Press release issued today as posted by JAL http://press.jal.co.jp/en/ (http://press.jal.co.jp/en/) .

[Skywards747]

I am very sorry to see what happening at JAL. Even though I was one of those "Gaijin" crew members that was given the boot recently, I have absolutely no animosity towards JAL. It kept me and my family in the "black" for nearly 15 years and most of the time I had a wonderful time flying with Japanese as well as fellow non-Japanese crew members.

JAL was privatized in 1987. But the state owned mentality remained within the company; that combined with the strong unions that often made some unreasonable demands, this outcome was inevitable.

When I joined JAL in mid nineties, it had already gone through a restructuring process after the bursting of the economic bubble few years earlier. But even then, it was shocking to see how the things were done, especially after coming from another major Asian airline which was always looking at the bottom line. I can only imagine what it was like before the restructuring.

A lot of money was spent on safety related things such as carrying lots of excess fuel for the flimsiest of reasons and keeping aircrafts in excellent shape. You rarely saw a deferred (carry over) defect on 20+ years old 747 classics that I flew.

It also spent millions unnecessarily, such as spending 30000 yen (~300$) each for two taxis for two crew members from the same flight who live on the same street, instead of asking them to share a ride. Senior crew got taxis to and from work at anytime and others between 10 pm – 7 am.

JAL had over 100 subsidiaries in mid 90s, from its Nikko hotel chain down to retail shops, language schools and laundries. Most of them were bleeding money, but used to shuffle incompetent managers around and keep them employed. I think JAL progressively got rid of those companies, way too late.

I wish all my friends at JAL well and sincerely hope it will come out of this crisis as a more efficient airline; and not go the way of other great airlines like PanAm and TWA.

[slamer.]

Govt bailout to keep broke JAL in the air


4:00 AM Thursday Jan 21, 2010


http://media.nzherald.co.nz/webcontent/image/jpg/JapanAirlines_220x14776440.jpg (http://javascript<b></b>:ExpandArticleImage();) Expand (http://javascript<b></b>:ExpandArticleImage();) Passengers of Japanese Airlines will retain their frequent flyer miles. Photo / AP

Japan Airlines says it can be reborn after filing for one of the country's biggest bankruptcies and entering a restructuring that will shrink Asia's top carrier and its presence around the world.
Staggering under a US$25.6 billion ($35 billion) debt mountain, the carrier applied for protection from creditors under the Corporate Rehabilitation Law - Japan's version of Chapter 11 - with the Tokyo District Court.
Japan's flagship airline will slash nearly 16,000 jobs, reduce pensions for retired staff, cut routes and shift to more fuel-efficient aircraft as part of its restructuring.
About $10 billion of government cash will keep JAL's planes in the air during the reorganisation. Lenders will forgive $8 billion in debt, and JAL shares will be removed from the Tokyo Stock Exchange on February 20, wiping out investors.
There was no word on the outcome of a fierce tug-of-war between Delta Air Lines and American Airlines for a slice of JAL's business. The airline's access to Asia is still a mouthwatering prize for foreign airlines.
A state-backed turnaround agency pledged 900 billion ($13.5 billion) in financial support for JAL - 600 billion in credit lines and a 300 billion cash infusion.

The bankruptcy is the fourth-largest in Japan, according to figures from Teikoku Databank, which tracks corporate failures. "This is not the end of JAL," transport minister Seiji Maehara told reporters.
"Today is the beginning of a process to keep JAL alive."JAL President Haruka Nishimatsu resigned, bowing deeply as he apologised for the company's troubles. Kazuo Inamori, a Buddhist monk and founder
of Kyocera Corporation and Japan's No. 2 mobile carrier KDDI, has been tapped as its next leader. "This is our last chance," Nishimatsu said. "I believe we can be reborn as an airline that can represent Japan again."

JAL said flights would continue uninterrupted and frequent flyers would not lose their miles. Tokyo asked foreign governments for co-operation to keep JAL flying around the world.The day's events culminate a process that began in October when JAL -
saddled with debts of 2.32 trillion - first turned to the Enterprise Turnaround Initiative Corporation of Japan for help.Under the prepackaged reorganisation, it will embark on a massive overhaul to shed the fat and inefficiency that hobbled its finances.
Maehara said the turnaround would involve 15,661 job cuts - a third of JAL's payroll - by March 2013.

The carrier will retire all 37 of its Boeing 747 jumbo aircraft and 16 MD-90s, which will be replaced by 50 small and regional jets.
JAL shares, which have lost more than 90 per cent of their value over the past week, tumbled another 40 per cent on Tuesday to 3 before finishing flat at 5 yen.
The company is now essentially worthless, with a market capitalisation of about 13.7 billion - the price of one Boeing 787 jet.

HARD LANDING
* JAL was founded in 1951 and came to symbolise Japan's rapid economic growth
* When Japan's 1980s property and stock bubble burst, risky investments in foreign resorts hit profits
* Traffic has slowed recently amid the global economic downturn and swine flu fears Competition from rival ANA and a safety lapses have also hurt.

- AP


http://media.nzherald.co.nz/webcontent/image/jpg/JapanAirlines_140x93.jpg (http://www.pprune.org/business/news/article.cfm?c_id=3&objectid=10621119)

[HKPAX]

JAL to axe 15,000 jobs
22-01-2010

Japan Airlines has announced that it's to shed 15,000 jobs -- almost a third of its workforce. The company, once Asia's largest carrier, applied for bankruptcy protection on Tuesday. Its share value had shrunk by then to less than the price of a single plane. The airline's demise coincides with a severe contraction in the Japanese economy.

[Turkpilot]

Im at J-AIR the 170 operation. We are told all will be okay, so we are told.... Right now we are about 19 expats here, and then there are expats i think at JAX but thats all that i am aware of.

[Sunstar320]

I would say they would the pulling out of Australia now, rumours floating around confirming that too.