Page last updated at 08:17 GMT, Thursday, 24 September 2009 09:17 UK

Japan Airlines requests bail-out

Japan Airlines plane
The airline had said it expected to make a heavy loss this year

Loss-making carrier Japan Airlines (JAL) has asked for a government bail-out to help it survive.

JAL president Haruka Nishimatsu made the request after meeting Japan's new transport minister. He also proposed a more drastic restructuring.

The airline recently announced plans to cut 6,800 jobs.

JAL's shares had already tumbled 18% to a record low on rumours that it was seeking public money, or that it might seek to break up the company.

Tie-up hopes

"Ultimately, we think that the use of more funds will reduce our debts to the public," Mr Nishimatsu said.

He made the comments to reporters after meeting Transport Minister Seiji Maehara, who took over the role after the Democratic Party took charge of the government.

Mr Nishimatsu plans to apply for public funds under the industrial revitalisation law.

The law means companies need to obtain approval from the government to restructure. They can then apply for loans from banks, which are backed by the Japanese government's wholly-owned Japan Finance Corp.

Media reports have said that several US and European airlines - including Air France-KLM, Delta Airlines and American Airlines - are in the running to take a stake in JAL and expand into Asia via code-sharing agreements.

Mr Nishimatsu said last week he hoped JAL would have a deal in place with an international carrier by the middle of October.

Sector suffers

The airline industry as a whole has suffered in the global downturn, hit by a combination of falling passenger numbers and high oil prices.

The International Air Transport Association (Iata) has increased its forecast for losses across the whole industry to $11bn for 2009, from the $9bn it predicted earlier this month.

Airlines have lost $6bn in the first half of the year alone, Iata said, with Asian airlines among the hardest hit.

In the Asia-Pacific region, Iata predicts airlines will report losses of $3.6bn for 2009.



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