Japan PM approves JAL revival plan ahead of announcement

TOKYO — Prime Minister Naoto Kan on Monday approved a rehabilitation programme for Japan Airlines which is undergoing a state-backed restructuring, ahead of its official announcement.Transport Minister Seiji Maehara informed Kan about the programme a day before the struggling carrier submits it to the Tokyo District Court, government officials said.Maehara told reporters that Kan agreed to the programme, while he stopped short of revealing details.JAL is now going through a court-led restructuring process with the help of a state-backed turnaround fund after filing for bankruptcy protection in January.The plan will reportedly include around 16,000 job cuts, a total of 522 billion yen (6.2 billion dollars) in debt waivers and a fresh capital injection worth 350 billion yen by the Enterprise Turnaround Initiative Corporation of Japan.The company has been negotiating with its creditors on fresh financial support under the programme as it faces pressure to speed up its plan to return to health, officials said.JAL has already said it will scrap 28 international routes and close 11 international bases, while 50 domestic routes will be terminated, along with eight offices.The company, which posted a two-billion-dollar loss for the nine months to December, has also said it aims to slash more than 15,000 jobs.JAL delayed submitting its restructuring programme to the court by two months until the end of August to give it more time to refine cost-reduction measures. Copyright © 2010 AFP. All rights reserved. More »

Add comment

Nick
Content

Submit