Japan Airlines approaches bankrupt status

The main lenders to Japan Airlines plan are ready to accept a restructuring package that would require the carrier to file for bankruptcy increasing the likelihood of a state bailout this month.

A state-backed turnaround fund is undersood to be planning to establish a credit line of more than 600bn yen (£4bn) along with a state-owned bank to ensure JAL can keep flying once a bankruptcy is announced.

Reflecting growing concerns over the potential fallout from a bankruptcy, reports said the government plans to tap diplomatic channels to reassure the 35 or so countries to which JAL flies that it would support the carrier. JAL, weighed down by $16bn (£10bn) in debt and mired in losses, applied for state funding for ailing companies.