THE Japanese government has agreed to double the offer of statefunded credit to Japan Airlines (JAL) to 200bn yen (£1.3bn), it emerged yesterday.
A state-run bank offered JAL aid of 100bn yen in November, and has already paid out more than half of that. Shares in JAL, which made a loss in four of the past five years, fell to record lows last week as speculation mounted it would file for bankruptcy.
Like many airlines, JAL has been hit hard in the global economic downturn.
The extra funding was agreed by Deputy Prime Minister Naoto Kan, Transport Minister Seiji Maehara and
other ministers at a meeting yesterday. "The government has decided to expand from 100bn yen to 200bn yen the line of credit from the Development Bank of Japan to Japan Airlines," an official statement said.
The announcement was made before trading resumes on the Tokyo Stock Exchange today.
JAL President Haruka Nishimatsu is against allowing the airline to go into bankruptcy, suggesting tough negotiations ahead between the airline and the government, the Asahi newspaper reported.
"The image (of bankruptcy) would affect us and we would lose customers," Nishimatsu was quoted as saying. "If we lose recognition from customers, restructuring would be difficult and this will trouble the ETIC (a state-backed fund) too."
City A.M. Reporter