Tuesday January 19, 2010

Japan Airlines (JAL) files for bankruptcy in $10 billion turnaround plan

bloomberg.com :

Japan Airlines (JAL) filed for the country's fourth-largest bankruptcy under a 900 billion yen ($10 billion) turnaround plan after four government bailouts failed to revive Asia's most indebted carrier. Asia's largest airline will shed staff, cut unprofitable routes and retire older planes as it restructures. The airline, worth more than $6 billion as recently as March 2009, will be delisted following the bankruptcy, wiping out shareholders. JAL, which flew at least 45 million passengers last year, will continue operations. Kazuo Inamori, the 77-year-old Kyocera founder, has been named to oversee JAL's restructuring as CEO. Delta Air Lines and American Airlines have made rival offers to invest in JAL or a restructured company to access routes in China and Japan.

JAL, Asia's first major flag carrier to seek bankruptcy, filled less than 65% of seats on domestic routes in each of the last 6 fiscal years. The airline suffered a 16th straight drop in overall passenger numbers in Nov 2009 as the global recession sapped travel. Worldwide international air travel likely fell 4.1% last year, causing industrywide losses of $11 billion, according to the International Air Transport Association.

- You could have pointed your finger at various factors like lack of management judgment, prolonged government support, rising oil prices, the global economy, or the unfolding trend of Peak Oil, Peak Airlines. There are plenty of reasons to choose from. But well, that was it. Now to see how they fare after the turnaround plan.

See also :

1. Japan GDP contracted record 14.2% in Q1 2009 on exports fall
2. Peak Oil, Peak Airlines - as oil prices go up, airlines cut flights and jobs
3. Japan Airlines set to file for bankruptcy on 19 Jan 2010
4. Japan Airlines (JAL) to cut 15600 jobs under turnaround plan

(2010-01-19 21:08:19 SGT) [Biz] Permalink

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