JAL flies on despite going belly up in Japan biggest failure

JAPANESE flag carrier, Japan Airlines (JAL), Asia's biggest air carrier, will continue to maintain flight services despite filing for bankruptcy protection in Tokyo District Court.

The company is now under the new management of the state-controlled Enterprise Turnaround Initiative Corporation (ETIC) under the Corporate Rehabilitation Law. JAL president and CEO Haruka Nishimatsu has resigned and Kazuo Inamori, the honorary chairman and founder of electronics firm Kyocera, who had been waiting in the wings, is now CEO.

Said a JAL statement: "The financial crisis in the fall of 2008 pushed the world into global recession and JAL Group suffered a significant decline in sales due to a decline in demand."

The Tokyo Stock Exchange delisted JAL yesterday. Transport Minister Seiji Maehara told a press conference that the government will fully support JAL's restructuring take steps to ensure that there is no disruption to flight services while it settles its US$25 billion debt load..

Joining JAL in the poor house are its two main subsidiaries - Japan Airlines International and JAL Capital - as they too filed for protection against creditors in Tokyo District Court.

The ETIC announced its decision to help JAL, thus placing the carrier under state control, reported Newark's Journal of Commerce. As a court-appointed administrator, the ETIC aims to turn around the airline in three years.

JAL is expected to cut 15,700 jobs, a third of its headcount, and dispose of 25 per cent of his 100 units.

(Source: www.schednet.com)