JAL shares up on bail-out reports

The airline expects to make a big loss this year

Shares in Japan Airlines (JAL) surged more than 11% after local media reported that the government may step in to bail out the troubled airline.

JAL lost about a quarter of its value last week as uncertainty grew about the loss-making airline's future.

Last month, the company's president Haruka Nishimatsu asked the government for emergency funding after refinancing plans failed to materialise.

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

It made a loss of 99bn yen ($1.1bn; £672m) between April and June.

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.

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

The International Air Transport Association (Iata) has predicted losses across the whole industry of $11bn (£6.8bn) in 2009.