The president of troubled Japan Airlines, commonly referred to as JAL, said he is against a bankruptcy proceeding under a state-restructuring plan, and says the airline has no plans to completely withdraw the airline from overseas flight.
On Sunday, the Kyodo news agency reported the government-controlled Development Bank of Japan (DBJ) would double its credit line for JAL to 200 billion yet ($2.15 billion). The move is considered a temporary measure to keep Japan’s flag carrier aloft.
The airline’s shares jumped 39 percent today after word of the announcement. JAL lost 25 percent of its stock value in 2009, as many investors feared the government task force would force the carrier into bankruptcy proceedings, but the announcement from the DBJ appears to have lightened the worry.
While JAL is strongly against bankruptcy, the government-controlled Enterprise Turnaround Initiative Corporation of Japan (ETIC), in charge of rescuing JAL, already told creditors they favor bankruptcy. Yet, JAL remains confident that this is the unwise thing to do.
“The image of bankruptcy would affect us and we would lose customers. If we lose recognition from customers, restructuring would be difficult and this will trouble the ETIC too.” JAL president Haruka Nishimatsu told the Asahi Shimbun.
In the same interview, Nishimatsu said he preferred Delta Air Lines as the airline’s overseas partner, rather than current OneWorld partner American Airlines. The airline was offered $1 billion in financial aide from both American and Delta.
“(Switching to SkyTeam) would involve a big process of changing systems, but (we need to consider) whether or not to value Asia. In that sense, SkyTeam has many Asian carriers.” – Nishimatsu told the Asahi.
Nishimatsu points out why JAL is a necessity to American and OneWorld. Of the three major airline alliances, OneWorld is the smallest, and is anchored by American Airlines (AMR Corp.). In addition to JAL’s vast presence in Asia, the airline has a good grip on several key inter-Japan routes – a place where OneWorld and SkyTeam would like to have.
The airline plans to announce their decision it will choose by early January.
