Ballooning debt leaves JAL in need of rescue

REPORTS in Japan have stated that Japan Airlines’ net loss may rise to about 500 billion yen (US$5.5 billion) for the financial year, as the struggling Asian giant looks destined to have to absorb hefty restructuring charges.The losses now predicted are almost eight times larger than JAL’s own earlier projected loss. The new massive debt figures have been incorporated into the latest recovery plan being put together by a government-appointed taskforce and presented to creditor banks.JAL has suffered disproportionately in comparison with other Asian majors and will now require a huge bailout to avoid entering bankruptcy.The airline has been heavily hit by high costs and a sharp downturn in airfreight and passenger traffic after the global financial crisis.

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