TOKYO, Oct 29 – Struggling Japan Airlines Corp. (JAL) will seek help from a new quasi-public body to turn around its loss-making operations, the airline and government said Thursday.
Asia\’s biggest carrier said it would cooperate fully with the Enterprise Turnaround Initiative Corporation of Japan, an agency launched this month to help debt-laden companies seen to have the potential to recover.
"We have asked the Enterprise Turnaround Initiative Corporation of Japan to help us revive the group and started preliminary consultations on revival assistance," JAL said in a statement.
The company, which lost more than one billion dollars in the April-June quarter amid a slump in international air travel, is seeking another public bailout, its fourth since 2001, to keep operating.
A government-appointed taskforce in its final report Thursday said it was confident JAL will be able to turn itself around if it slashes jobs and cuts some routes, said Transport Minister Seiji Maehara.
Task force leader Shinjiro Takagi warned, however, that "a significant amount of capital will be needed for JAL to restructure itself."
Maehara said the task force found that "it is surely possible for the carrier to restructure itself through downsizing aircraft and its organisation, streamlining flights and reduction of its legacy costs."
The Nikkei business daily reported earlier that the agency, formed this month, may guarantee loans extended by the Development Bank of Japan and other JAL creditors, or it may lend to the company directly.
The carrier needs a bridge loan of about 200 billion yen (2.17 billion dollars) by the end of this year, it said.
JAL is expected to plunge 5.5 billion dollars into the red this financial year, according to media reports. Kyodo News has reported the airline has decided to reduce its group workforce by 13,000 by the end of March 2015, 4,000 more than its initial plan.