Manila Bulletin
April 3, 2011, 11:59am
TOKYO (Dow Jones) – Japan Airlines Corp. said it has effectively emerged from bankruptcy protection, completing a restructuring process that entailed a massive curtailing of its workforce and routes.
But the outlook for the airline remains cloudy with travel demand sharply eroded by the massive earthquake and tsunami that hit northern Japan on March 11, sparking a nuclear crisis.
JAL said it will reduce capacity on international routes by decreasing flight frequency and switching to smaller aircraft during the period between April 6-27 to address a decline in travel demand as a result of the quake.
"We cannot be optimistic. Reservations are not growing on the back of concerns and uncertainty about the nuclear power plants," JAL President Masaru Onishi said at a press conference, citing an approximate 28% drop in domestic passengers and 25% decline in international passengers following the quake.
JAL said it has procured a total of ¥254.96 billion from 11 financial institutions and made a full repayment of rehabilitation debts amounting to ¥395.15 billion.
The carrier has already accepted a ¥350 billion injection from the government-backed Enterprise Turnaround Initiative Corp. It will further raise ¥12.7 billion in capital through a third party allotment of common shares to eight companies. JAL Chairman Kazuo Inamori said he considers the new capital as sufficient and said the company has no plans for additional financing for now.
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