Page last updated at 11:46 GMT, Monday, 22 June 2009 12:46 UK

Japan Airlines to receive bailout

Japan Airlines plane
The airline expects a heavy loss for the year

The Japanese government is ready to make an emergency loan to the country's biggest airline.

Loss-making Japan Airlines (JAL) could receive up to 100bn yen ($1bn; £635m) in state aid, say reports, on condition that the airline's management improves.

Any loan would be made through state owned Development Bank of Japan (DBJ).

Earlier this year JAL, hit by the global economic downturn, looked to borrow up to 200bn yen from a government low-interest loans scheme.

Finance Minister Kaoru Yosano said he had received a request from transport minister Kazuyoshi Kaneko, in charge of overseeing airlines, for a DBJ loan to JAL.

"I replied that we hope to co-operate through DBJ loans and that I will pass on the request to them," Mr Yosano told a news conference after a cabinet meeting.

"The DBJ will extend loans, not unconditionally, but on the premise that (the airline) must do its best to improve management," he added.

Government support for JAL would encourage commercial banks to lend to the airline, he suggested.

Business focus

In February JAL predicted an annual loss of 34bn yen as the global crisis hits demand.

JAL said it hoped to publish a new business plan as early as possible, reflecting the government's help.

Earlier this year the airline launched a programme of job cuts, plans for fuel-efficiency and a focus on business customers.

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