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Japan Airlines Gets $1bn Government Bailout

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http://business.timesonline.co.uk/tol/busi...icle6553359.ece

Japan Airlines, the loss-making Asian giant, is to receive a $1 billion government-backed loan to tide it over while management struggles to concoct a “crisis plan†to save the company.

But analysts said that the former state-owned carrier was unlikely to undertake the sort of drastic reform it needs because of pressure from the Government to remain in the role of public service.

Unusually for Japan, the loan will come with the overt condition that JAL visibly improves the way the company is run – to the satisfaction of the Government itself, much like the company operated before privatisation.

That restructuring process is expected to see a significant portion of its existing route network “scrutinisedâ€, though not necessarily cut back, along with other long-overdue changes to management structure.

As the biggest carrier in Asia, JAL has suffered directly from the financial ravages of the global economic downturn, a large-scale exodus of foreign bankers and executives from Japan, and Tokyo’s diminishing position as a world financial centre.

But JAL has also suffered from a series of unspoken guidelines that have defined the way its route network is constructed, particularly since its domestic rival, All Nippon Airways, has cut dozens of domestic and international routes in an attempt to become profitable. On occasions where JAL has threatened to close a domestic route, local and central governments have applied pressure on management to abandon those plans, and JAL has yielded.

To JAL’s additional misfortune, efforts by the Government to boost regional economies throughout Japan have often involved constructing large airports in places that barely merit daily connections to Tokyo and other major cities.

JAL is effectively forced to play the role of public transportation system, said Yoshitomo Aoki, an aviation industry author and analyst, “so even though very drastic measures need to be taken by JAL, that burden of public service and the pressure from the land ministry means it won’t happenâ€.

Highlighting that likely turn of events, Kazuyoshi Kaneko, the transport minister, described JAL as “an extremely important company for our country’s economy, society and peopleâ€.

The loans themselves will come from the state-backed Development Bank of Japan, though Kaoru Yosano, the finance minister, added that the Government itself would impose conditions. The transport ministry, he added, will give JAL “strong instructions†on how to improve its management.

Zombie airliners next?

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Zombie airliners next?

Alitalia have been a zombie airline for about three decades now.

Bailed out about 15 times with taxpayer money, huge waste, nobody happy.

Aaaah, but things are great in the Eurozone: JCT never stops telling us :rolleyes:

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There was an interview on BBC News 24 yesterday with Stelios Whatsisname from EasyJet, and he was going on about how p*ssed off he was with national flag carriers like Alitalia continually being bailed out, when they should have gone long ago.

His theory was that the national flag carriers are being kept alive to keep Airbus in business - the whole thing is a merry-go-round rather than a proper business sector.

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There was an interview on BBC News 24 yesterday with Stelios Whatsisname from EasyJet, and he was going on about how p*ssed off he was with national flag carriers like Alitalia continually being bailed out, when they should have gone long ago.

His theory was that the national flag carriers are being kept alive to keep Airbus in business - the whole thing is a merry-go-round rather than a proper business sector.

Branson was on BBC breakfast this morning saying the same thing about BA. Why bother running your company efficiently and effectively when you know that when push comes to shove you will be bailed out by the govt?

Obviously he will gain from BA going under, but he admitted that in effect by saying that VA would be able to take slots that BA currently have, and would be able to employ more people because of it.

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There was an interview on BBC News 24 yesterday with Stelios Whatsisname from EasyJet, and he was going on about how p*ssed off he was with national flag carriers like Alitalia continually being bailed out, when they should have gone long ago.

His theory was that the national flag carriers are being kept alive to keep Airbus in business - the whole thing is a merry-go-round rather than a proper business sector.

is there a proper business sector anywhere anymore

i think i need to find galts grunch

im sick of this shite

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