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Jal Requests Government Bailout

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http://www.nytimes.com/2009/09/25/business...ml?ref=business

Japan Airlines has asked for a government bailout, the company’s chief executive said Thursday, as the struggling carrier battles for survival by canceling flights and laying off workers.

Before the announcement, the company’s shares tumbled to a record low on reports that lenders might seek to break up the carrier and a media report of the bailout plea.

JAL, swamped by ¥1.4 trillion, or $15.4 billion, of debt amid a global slump in aviation, has been wooed by rival airlines seeking to gain access to its valuable route network and high-paying Japanese passengers.

But the airlines, from both the SkyTeam and Oneworld airline alliances, have not proposed investing the full ¥250 billion JAL reportedly needs to the end of its financial year next March.

“Nothing’s sure about JAL’s future. It’s already Japan’s G.M.,†said Takahiko Kishi, a Mizuho Investors Securities analyst, referring to General Motors, the American automaker that needed a government bailout.

“JAL would have to come up with really drastic restructuring to convince lenders or the government, but even if they do, the market would doubt whether such measures could really be implemented.â€

JAL’s chief executive, talking to reporters after meeting Japan’s new transport minister, said that the indebted carrier needed government help.

“Considering debt repayments planned ahead, we thought asking for the public fund injection would make the most sense,†Haruka Nishimatsu said.

Mr. Nishimatsu rejected suggestions that some JAL creditors may seek to break up his airline in an effort to separate out the worst parts of the company.

That's very generous of them to ask for a public bailout, how thoughtful.

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JAL is intimately involved in the Japanese government's two-decade-long stimulus efforts.

i.e. The government went around building totally unnecessary airports in far-flung parts of the country, and then told JAL to service them. The government are now starting to feel the consequences of paying people to dig and fill holes.

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JAL is intimately involved in the Japanese government's two-decade-long stimulus efforts.

i.e. The government went around building totally unnecessary airports in far-flung parts of the country, and then told JAL to service them. The government are now starting to feel the consequences of paying people to dig and fill holes.

cartoon.jpg

Edited by Concrete Jungle

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JAL is intimately involved in the Japanese government's two-decade-long stimulus efforts.

i.e. The government went around building totally unnecessary airports in far-flung parts of the country, and then told JAL to service them. The government are now starting to feel the consequences of paying people to dig and fill holes.

A plan without flaws.

Genius.

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