Japan Airlines to file for bankruptcy
Japan Airlines (JAL), Asia’s largest airline, is expected to file for bankruptcy protection on Tuesday, bringing an end to months of speculation about the airline’s financial future, riddled by debt.
The bankruptcy filing, should it go ahead, is to be followed by a restructuring program, backed by the government, intended to trim down the airline, firing a third of its employees, and removing some routes from its schedule.
JAL stock has fallen by over ninety percent in the last few days, due to the financial uncertainty of the airline. Shares for JAL were trading as low as US$0.05 earlier today at the Tokyo stock exchange.
The Wall Street Journal reported on January 7 that American Airlines raised its JAL investment offer by $300 million, to $1.4 billion. In separate comments to the press, Delta President Ed Bastian said that Delta is “willing and able to raise additional capital through third-party resources.”
On the same day, the Business Travel Coalition, a travel group representing 300 international companies, announced their opposition to an alliance between Delta and JAL. Chairman Kevin Mitchell said that such an alliance would likely create a monopoly, totaling 62% of the market share on flights between the United States and Japan. In a letter addressed to Transport Minister Seiji Maehara, the group said that remaining with American would be “obviously best for competition and consumer choice.”