Pressure grows on JAL to cut costs

Friday, 29 May, 2007 0

TOKYO – Japan Airlines Corp has asked its four major creditors to provide hundreds of billions of yen to bolster its capital base, sources have told Ashai Shimbun.

The banks may require the struggling airline to carry out further restructuring, including a payroll overhaul, analysts said.

The four banks are considering swapping part of their outstanding loans to JAL with equity stakes in the company and other options, the sources said.

JAL is saddled with about 1.7 trillion yen in interest-bearing debts.

JAL is seeking agreement from the four banks before its shareholders meeting in late June, the sources said.

Bev

Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.