Japan Airlines hopes to emerge from bankruptcy protection as a radically transformed operation built around a fleet renewed from "low-efficiency large aircraft to high-efficiency small aircraft".
The national carrier is thought to be poised to retire its 37 Boeing 747-400s, axe 15,700 jobs - one-third of its workforce - and slash unprofitable routes.
JAL has a fleet of 279 aircraft with more than 70 on order, including 35 Boeing 787s. It serves 217 destinations in 35 countries.
In the biggest airline bankruptcy since the fallout from 9/11 claimed Northwest Airlines and Delta Air Lines, JAL last week succumbed to the weight of its ¥2.3 trillion ($25.2 billion) debt. In its second quarter to 30 September 2009, JAL lost ¥32.1 billion ($348 million).
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© Boeing
JAL has 35 Boeing 787's on order |
The Japanese government has pledged up to ¥900 billion to keep the airline afloat during restructuring, inclusive of ¥300 billion injected by Japan's Enterprise Turnaround Initiative Corporation. Creditors have agree to waive ¥730 billion in debt.
In addition, JAL's board and president Haruka Nishimatsu has resigned, leaving senior managing director Masahato Uehara in charge until a new management structure is decided in February.
JAL, which says it is confident of a "swift revitalisation" that will see it "reborn as a leading airline group", is also being courted by rival airline alliances. Oneworld partner American Airlines and private investment group TPG are offering to invest $1.4 billion. Delta Air Lines is backing a $1 billion offer to lure JAL to its rival SkyTeam grouping.
Privately owned rival All Nippon Airways has expressed "concern" that public funding of JAL will undermine fair competition.