Japan Airlines denied bailout on fears cost-cutting will not go far enough

JAPANAIRLINES was yesterday denied its request for a government bailout, as the country&rsquo;s new transport minister withheld financial support on fears the carrier&rsquo;s cost-cutting plans would not go far enough.<br /><br />The request for a cash injection from the carrier&rsquo;s chief executive Haruka Nishimatsu came as the airline&rsquo;s shares tumbled 16 per cent to a record low, after being hit by fears that lenders might seek to break up the company.<br /><br />Japan Airlines, which is buckling under the weight of $15bn (&pound;9.3bn) of debt, is being wooed by both Delta and a rival group led by American Airlines, offering capital in return for closer business ties. <br /><br />The company is expected to report its second straight annual loss.<br /><br />Asia&rsquo;s largest airline by revenue has been scrambling to put together a restructuring plan to submit to the government this month, a condition of a state guarantee on a 100bn yen (&pound;9.1bn) loan earlier this year.<br /><br />'The likelihood of further state support has been thrown into doubt by a change in government in August, which brought the Democratic Party to power, ending the rule of the Liberal Democratic Party, which had supported state help for Japan Airlines.<br /><br />Transport Minister Seiji Maehara met with the airline&rsquo;s boss yesterday. He reiterated he did not want to see the company go bankrupt but he said he was not ready to approve a request for the state to prop up the carrier by buying shares.<br />