JAL shares down 32 pct as bankruptcy worries mount

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ATC
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JAL shares down 32 pct as bankruptcy worries mount

Post by ATC » 30 Dec 2009, 10:32

Dec 30 -

Shares of Japan Airlines Corp tumbled 32 percent to a record low on Wednesday on growing investor worries the struggling carrier will be restructured in bankruptcy court as part of a state bailout.

Sources have told that a state-backed turnaround fund now weighing whether to support JAL is considering using a bankruptcy procedure similar to Chapter 11 in the United States as part of its restructuring plan.

"Today's slide reflects mounting expectations that JAL is headed for a court-led reorganisation," said Takahiko Kishi, an airline analyst at Mizuho Investors Securities. Shares of JAL were down 32 percent at 60 yen as of 0047 GMT, a record low for the carrier. The benchmark Nikkei average was virtually flat.

Japan Airlines applied for a bailout in late October from the Enterprise Turnaround Initiative Corp of Japan (ETIC), an organisation of turnaround specialists that can draw on state-guaranteed funding to offer financial aid to ailing firms. The ETIC is expected to make a decision on whether to support JAL next month. The ETIC can draw on 1.6 trillion yen in state-guaranteed funding in the current fiscal year to March for loans and investments into struggling but viable firms. The ETIC has told JAL's creditors that it was considering a plan under which the airline would apply for court protection under the Corporate Rehabilitation Law, but it has not ruled out a private, out-of-court restructuring, sources have said.

Bankruptcy proceedings usually lead to a sharp cut in the payment of sales receivables and other creditor claims. There is a risk JAL would not be able to make payments for fuel, parts and other transactions needed to keep flying. The ETIC plans to keep paying for such transactions if JAL files for bankruptcy, the Nikkei newspaper reported earlier on Wednesday, adding that airport usage fees and insurance policy premiums would also be guaranteed.

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Re: JAL shares down 32 pct as bankruptcy worries mount

Post by tsv » 30 Dec 2009, 22:23

I've got a one world rewards flight booked for my family in July. What are the chances they will honour our booking if;

a. they go into bankruptcy
b. they leave one world and switch to Sky Team?

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Re: JAL shares down 32 pct as bankruptcy worries mount

Post by dna » 31 Dec 2009, 11:31

The Japanese government reportedly is looking at a plan under which JAL would abandon all its international routes and become a domestic carrier. Its international routes would be taken over by ANA.

http://news.smh.com.au/breaking-news-wo ... -lky2.html

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Re: JAL shares down 32 pct as bankruptcy worries mount

Post by RoMax » 31 Dec 2009, 12:39

That would be good for ANA. Stopping all the non-profitable routes or try to make them profitable and maintain or expand the profitable routes.
It would make ANA a very powerfull airline and one of the biggest in Asia. (Good for Star Alliance)

And I think it is better for JAL than go in bankruptcy.

NCB

Re: JAL shares down 32 pct as bankruptcy worries mount

Post by NCB » 31 Dec 2009, 14:20

We're getting closer and closer to a proposed operational fusion of NH and JL.

JL is a total disaster and NH has the potential to become a mega-player on the global market.
NH has they keys of HND, which will undoubtly become the new mega-hub of the Pacific.

To be most efficient, the plan must be executed in such manner that NH gets full control of all international flights. There is room for 2 big domestic players out of HND, but there is no room for 2 international players.

2005 traffic figures for the largest domestic routes:
HND-Chitose 9 210 000 pax
HND-Fukuoka 8 090 000 pax
HND-Itami (Osaka) 6 470 000 pax
HND-Naha 4 940 000 pax
HND-Hiroshima 2 340 000 pax
HND-Kagoshima 2 270 000 pax
HND-Komatsu 1 880 000 pax
HND-Kansai 1 850 000 pax
HND-Kumamoto 1 840 000 pax
Chubu (Nagoya) - Kansai 1 510 000 pax

I think that fleetwise, they will need to shift some widebody capacity from JL to NH. NH could use all the B777's they can get to operate to Oceania, Asia, Europe and the U.S. They could also use some more B763ER's. For some longhaul routes where both JL and NH operate now with B777, NH could use additional B744 capacity.

Finally some streamlining in this market that's so messed up!

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Re: JAL shares down 32 pct as bankruptcy worries mount

Post by andorra-airport » 09 Jan 2010, 13:24

JAL set to file for bankruptcy on January 19......

The decision came as its creditor banks dropped their earlier proposal for an out-of-court reorganisation of the troubled airline after ensuring public support, the Nikkei business daily reported.

JAL has said it would decide this month on whether to remain with American in the Oneworld alliance or switch to rival SkyTeam with Delta.

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Re: JAL shares down 32 pct as bankruptcy worries mount

Post by LX-LGX » 09 Jan 2010, 18:13

andorra-airport wrote:JAL set to file for bankruptcy on January 19.
Indeed, but "to file" seems to be more important then "bankruptcy":

from Bloomberg.com: "... The Tokyo-based carrier will file for bankruptcy in the week starting Jan. 18, and the Enterprise Turnaround Initiative Corp. will agree to provide financial aid to Japan Air the same day, said a person familiar with the negotiations, who declined to be named..."

Full article = "Japan Air’s Largest Banks Said to Agree to Bankruptcy (Update 1)":
http://www.bloomberg.com/apps/news?pid= ... rIIc&pos=6

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Re: JAL shares down 32 pct as bankruptcy worries mount

Post by sn26567 » 10 Jan 2010, 11:12

Delta seems to take the lead in a possible takeover of or investment in JAL, but American is sais to prepare a counter bid. It is clear that JAL would prefer American which is in the same alliance, but the Government will have the last word.
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Re: JAL shares down 32 pct as bankruptcy worries mount

Post by sn26567 » 12 Jan 2010, 09:26

Japan Airlines will not decide on a partnership with either Delta Air Lines or American Airlines before a new management committee comes into place, according to Reuters.
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Re: JAL shares down 32 pct as bankruptcy worries mount

Post by sn26567 » 14 Jan 2010, 11:15

British Airways Offers JAL European Lifeline

British Airways (BA) needs a Far Eastern partner if it is to have continuing global pretensions and has now, according to reports, made overtures to destitute Japan Air Lines (JAL) about possible Asia-Europe collaboration.

Analysis in The Times online
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Re: JAL shares down 32 pct as bankruptcy worries mount

Post by dna » 14 Jan 2010, 11:56

British Airways (BA) needs a Far Eastern partner if it is to have continuing global pretensions and has now, according to reports, made overtures to destitute Japan Air Lines (JAL) about possible Asia-Europe collaboration.
If JAL (or whatever remains of it) were to ally itself with Delta (Skyteam), it would be a big blow for the Oneworld alliance. So it is not surprising that AMR and BA are wooing JAL.

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Re: JAL shares down 32 pct as bankruptcy worries mount

Post by sn26567 » 19 Jan 2010, 10:26

SkyTeam Ready To Welcome JAL In Its Airline Alliance

SkyTeam said Monday it is ready to welcome Japan Airlines Corp. into its airline alliance, adding that the Japanese company, known as JAL, hasn't made a final decision yet.

JAL's regional Asian network will be complementary to the networks of SkyTeam members Korean Air and China Southern.

Full article from CNN and Dow Jones
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