Sunday January 10, 2010

Japan Airlines set to file for bankruptcy on 19 Jan 2010

channelnewsasia.com :

Japan Airlines (JAL) is set to file for bankruptcy on 19 Jan 2010, the first step in a court-led rehabilitation process for the debt-ridden Japanese carrier. The decision came as its creditor banks dropped their earlier proposal for an out-of-court reorganisation of the troubled airline. The state-backed Enterprise Turnaround Initiative Corp will provide 300 billion yen (US$3.2 billion) investment so that it can continue operation.

The government body will also ask JAL's creditors to waive a further 350 billion yen in loans to the airline, while speeding up its restructuring, including massive trimming of its international routes. The carrier is seeking its fourth government bailout since 2001. The airline, which lost about US$1.5 billion in the 6 months to Sep 2009, has said it plans thousands of job cuts and a drastic reduction in routes.

- The airline industry is an obvious case of hyper-sensitivity to oil prices, and with crude oil futures rising and breaking through the $80 resistance level, the peakoiler community has been rumbling about airlines hurting again. In any case, if (/when) oil prices rise further, JAL's case may not be the last we hear about airline bankruptcies either.

See also :

1. More fuel woe for Japan Airlines
2. Airlines tremble at prospect of $100 oil
3. JAL to cut 4300 jobs under revival plan
4. Japan GDP contracted record 14.2% in Q1 2009 on exports fall
5. Peak Oil, Peak Airlines - as oil prices go up, airlines cut flights and jobs

(2010-01-10 22:23:39 SGT) [Biz] Permalink

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