The Tokyo District Court Nov. 30 approved a state-backed rehabilitation plan for bankrupt Japan Airlines.
JAL filed for bankruptcy protection in January under the Corporate Rehabilitation Law, which is similar to Chapter 11 in the U.S.
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 plan features approximately $6.2 billion in debt forgiveness by creditor banks, a $4.2 billion additional investment in JAL by ETIC, and 16,000 job cuts in the JAL group by the end of next March.
By The Numbers: Asia-Pacific Airlines' Freight Traffic.
The rehabilitation plan also calls for termination of many loss-making domestic and international routes. JAL has already cut back on its cargo operations in recent months and stopped operating its own freighter flights at the end of October.
JAL is expected to receive new loans totaling about $3.3 billion from its major creditor banks and to repay all its remaining debts by the end of next March, completing the rehabilitation process.
JAL's management still faces unresolved issues, including the forcible dismissal of its pilots and cabin attendants after its voluntary retirement program failed to meet its job reduction target.
JAL Chairman Kazuo Inamori said at a press conference on Tuesday the carrier will slash jobs "no matter what." "We just have to do it in order to turn JAL into a strong company," he said.
JAL will need additional capital of about $595 million to strengthen its financial base in addition to ETIC's planned cash infusion on Wednesday, Dec.1, Inamori said.
He said that JAL has yet to make specific requests to potential investors. He also said it is possible that the airline will get investment from electronics firm Kyocera, of which he is a founder, if it cannot find other supporters.
-- Contact Hisane Masaki at firstname.lastname@example.org.