Struggling carrier Japan Airlines (JAL) has secured an emergency loan from the Development Bank of Japan.
The airline said the loan was “necessary for continuance” of its flights, adding that without it “an event which would interfere with our flight operations could occur”.
The full amount of the loan has not been revealed by JAL, but previous reports suggested the airline needed a loan of €1.34bn (180bn yen), and that it would have run out of cash by the end of this month.
JAL has also asked employees and former staff to take a 40 per cent cut in their pensions. The 17,000 staff and 9,000 pensioners were told by the airline management that it faced bankruptcy if payments were not cut.
The airline’s pension fund currently has a deficit of €2.49bn (JPY330bn). JAL President Haruka Nishimatsu had made a plea back in May to the company’s pension fund for payments to be reduced by more than half, Reuters reported.
Future restructuring of the airline is expected to be overseen by the government’s Enterprise Turnaround Initiative Corporation of Japan.
JAL received a loan of $1.1bn earlier this year to help it with its deficit from the previous Japanese government. It has also been in talks – now on hold – with two US carriers, Delta Air Lines and American Airlines, a fellow member of the oneworld alliance, about a possible cash injection of $300m.
JAL lost $692m last year and announced a $1bn loss for the quarter to June this year. It is heading for a deficit of $700m for the financial year ending next March.
For more information visit jal.com.
Report by Sara Turner