JAL teeters on brink of bankrupcy
Monday, 12 Jan, 2010
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American Airlines has now offered an enhanced US$2 billion investment deal to stop Japan Airlines from going under.
Japan Airlines is still hoping for a government bail out after shares plummeted by 45% today as the carrier heads towards bankruptcy.
The airline, whose Asian network is coveted by US carriers, has had previous investment offers from American Airlines, with Delta also showing an interest, but the beleagured airline is still hoping that the Japanese government will come to the rescue.
However, this depends on a number of factors including employees agreeing to see their pension payouts hacked back which would reduce the airline’s financial woes. It is currently running a £2.2bn deficit.
American and Delta both have much at stake in all this. The former says it will invest if JAL remains with the Oneworld alliance, the latter if it jumps ship to SkyTeam. Should JAL move, this would represent a major boost to Delta’s alliance, providing more of an end to end service to customers. It would also be a major blow to Oneworld, whose other members include Qantas and BA.
By Dinah Hatch
Phil Davies
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