The Japanese Government is considering guaranteeing about ¥700 billion ($7.8 billion) in loans for struggling Japan Airlines, according to news reports in the country.

The funds will be allocated through an extra budget that is expected to be approved this week, says the Nikkei business daily. The newspaper did not name its sources.

An airline spokeswoman declines to comment on the report.

JAL posted a fiscal second quarter net loss of ¥32.1 and has applied to the government-backed Enterprise Turnaround Initiative Corporation of Japan (ETIC) for a bail-out.

Source: Air Transport Intelligence news