JAL scores another government bailout
24 / 11 / 2009
AFTER months of negotiation struggling Japan Airlines (JAL) has finally secured another government loan. This is the fourth time since 2001 that the Japanese carrier has managed to persuade the government for much-needed funds.The exact amount of the loan has not been disclosed but the airline said it was “funds necessary for the continuation of our flight operations”.Unless the Japanese government has been particularly generous though it is unlikely to have solved all of JAL’s problems as it still has debts of US$15 billion. Between July and September alone it lost $364 million and like British Airways, it also has problems with a bloated pension deficit.The handout at least means that JAL does not have to continue considering potential suitors, notably a $1 billion offer from Sky Team, led by Delta. This is only a temporary reprieve however and JAL will have to make some substantial gains in profitability it is to make it permanent.There are at least some signs that exports are making a slight recovery. In October exports totalled $60 billion. That’s down 23.2 per cent from the same month last year but it is the slowest decline this year and means that there has been two consecutive quarters of growth. Imports are still down though, dropping 35.6 per cent in October compared to last year.