Struggling Japan Airlines submitted its state-backed rehabilitation plan to the Tokyo District Court on Tuesday, two months later than initially planned.
JAL filed for bankruptcy protection in January 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.
Following the bankruptcy protection filing with the Tokyo District Court, the Tokyo Stock Exchange delisted JAL shares in February.
By The Numbers: Asia-Pacific Airlines' Freight Traffic.
With the rehabilitation plan submitted to the court and then formally announced on Tuesday, the airline aims to swing back into the black in the current fiscal year ending on March 31, 2011 and relist by the end of 2012.
Earlier on Monday, Prime Minister Naoto Kan had given the green light to the rehabilitation plan, which calls for termination of many loss-making domestic and international routes and a massive workforce reduction, among other things.
As a court-appointed administrator, Enterprise Turnaround Initiative Corp. of Japan, the government's turnaround body, played a central role in working out the rehabilitation plan for JAL.
The Tokyo District Court is expected to approve the plan by the end of November.
Speaking at a press conference following the submission of the plan, JAL Chairman Kazuo Inamori expressed his firm determination to fully implement the plan "without letting it prove to be pie in the sky."
The rehabilitation plan specifically features a $6.14 billion debt forgiveness by creditor banks, a $4.12 billion additional investment in JAL by ETIC, 16,000 job cuts in the JAL group (one-third of the current workforce) by the end of next March, termination of 45 money-losing domestic and international routes and a withdrawal from the cargo flight business.
Although JAL's main creditor banks have already signaled their agreement to the rehabilitation plan, negotiations have yet to be concluded between the carrier and the banks over more than $3.53 billion in refinancing, as well as fresh loans needed for new aircraft purchases.
JAL suffered a net loss of $2.09 billion in the first nine months of fiscal 2009, which started in April 2009, compared with a net loss of $22.35 million a year earlier. JAL's group operating revenue from its overall operations tumbled 26.6 percent in the April-December period from a year earlier to $13.47 billion.
According to figures released by JAL on Aug.10, JAL's international passenger volume in the April-June quarter fell 2.6 percent. Domestic passenger volume fell 0.4 percent.
In the April-June quarter, JAL's international cargo volume totaled 141,259 tons, up 2.7 percent from a year earlier. JAL's domestic cargo volume amounted to 109,305 tons, up 1.9 percent from a year earlier.
-- Contact Hisane Masaki at firstname.lastname@example.org.