Japan Airlines Files for Bankruptcy
Carrier to slash workforce by a third as part of restructuring
January 19, 2010
As expected, Japan Airlines Corp. filed for bankruptcy protection in Tokyo's district court on Tuesday, representing one of that nation's largest corporate failures.
Japan Airlines will cut 15,661 jobs, or one-third of its payroll, by March 2013; reduce pensions; and retire its 37 Boeing 747 jumbo planes and 16 MD-90 aircraft. Those planes will be replaced with 50 small and regional jets. In addition, lenders will forgive $8 billion in debt.
The company, which has $25.6 billion in debt and has secured $10 billion from the Enterprise Turnaround Initiative Corp. of Japan, saw its shares drop 90% over the past week. Japan Airlines will be delisted from the Tokyo Stock Exchange on Feb. 20.
Japan Airlines, the first Japanese airline, was founded in 1951 while the country was under Allied occupation. It was nationalized in 1953 and privatized in 1987. The Japanese government has provided bailout assistance four times since 2001.
For more information on related topics, visit the following:
