New Government lifeline for JAL but bankruptcy must be filed

first_imgSource = e-Travel Blackboard: W.X <a href=”” target=”_blank”><img src=”;cb=INSERT_RANDOM_NUMBER_HERE&amp;n=a5c63036″ border=”0″ alt=””></a> Japan Airlines has been thrown a new lifeline as the government moves to increase its line of credit, but reports out of Japan claim that the carrier will first have to move towards bankruptcy.A formal bankruptcy submission could come as early as this week, the Nikkei reported, this would enable the government to put in place a new management team as well as a restructuring program.This move would see the government reject equity investment bids by both Delta Air Lines and American Airlines, who over the last few months have been eager to ally themselves with the flailing carrier.Further indication that a government bailout was likely was given in a local press conference last week attended by government ministers including Naoto Kan, Deputy Prime Minister and Finance Minister.During the briefing indications were given that the bailout fund given to JAL could be doubled, when Mr stated that he was expecting a state-backed fund to support the flailing carrier.JAL’s debt is believed to be sitting at around some US$16 billion.last_img read more