Hisane Masaki, Special Correspondent | Sep 23, 2012 12:59PM EDT
Japan Airlines Corp. (JAL) relisted on the Tokyo Stock Exchange (TSE) on Wednesday, demonstrating its full recovery from bankruptcy only 32 months ago both nominally and virtually.
JAL President Yoshiharu Ueki said in a statement that the relisting just marks a fresh start for the airline and vowed to make every effort to further improve its business performance through safe flight operations and better services while learning lessons from its past mistakes.
In their first day of trading on the First Section of the TSE, JAL shares closed at 3,830 yen ($48.50), barely above their initial public offering (IPO) price of 3,790 yen ($48.00). The IPO is the world’s second-biggest share sale this year after U.S.-based social networking giant Facebook Inc. JAL’s market value is one of the largest among airlines in the world, at about $8.7 billion.
Enterprise Turnaround Initiative Corp. of Japan (ETIC), a government body that played a central role in the rehabilitation process for JAL, sold all its 175 million JAL shares, or 96.5% of the airline’s outstanding shares. ETIC spent $4.4 billion in public funds to bail out the airline and has now recouped those funds plus nearly $3.8 billion.
JAL filed for bankruptcy protection in January 2010 under the Corporate Rehabilitation Law, which is similar to Chapter 11 in the U.S., marking one of the biggest corporate failures in Japanese history. JAL shares were delisted from the TSE the following month. The carrier flew out of bankruptcy protection in March 2011.
JAL carried out drastic restructuring measures, including cutting more than one-third of its workforce and terminating many loss-making domestic and international routes. These turnaround efforts paid off.
JAL’s net profit soared 111.2 percent in the first quarter of fiscal 2012, which started on April 1, from a year earlier to $340.5 million on a consolidated basis. The airline attributed the strong showing to recovering passenger traffic and strenuous cost-cutting efforts.
JAL’s cargo operations are also recovering. Its international cargo volume grew for the sixth successive month in July on a year-on-year basis, rising 3.0 percent to 21,026 tons.
Contact Hisane Masaki at yiu45535@nifty.com.