TOKYO, Japan - January 11, 2010 - A billion-dollar battle between American and Delta to secure a capital alliance with Japan Airlines (JAL) has fizzled out because Asia’s biggest carrier is on a “countdown to bankruptcy”.
Government insiders in Tokyo said that it had become clear within the past few days that restructuring JAL for survival would probably happen with the airline under administration.
Until that happens, and new management is in place, rival carriers will not be invited to take large stakes in JAL.
Officials describe a scramble to maintain business as usual at JAL as creditors and the government discuss the troubled company’s future. Bankruptcy contingency plans are understood to stretch to co-opting the Japanese diplomatic corps to man the phones at understaffed JAL offices worldwide. Embassies may also be used to soothe local suppliers that have payment concerns.
JAL’s future is being settled amid a maelstrom of competing interest groups. A state-backed turnaround group is investigating how the restructuring should be handled and is debating how much funding should come from the state purse. Some ruling party MPs have said that they favor liquidation. A trio of private sector creditors is keen to avoid that outcome.
Government insiders in Tokyo said that it had become clear within the past few days that restructuring JAL for survival would probably happen with the airline under administration.
Until that happens, and new management is in place, rival carriers will not be invited to take large stakes in JAL.
Officials describe a scramble to maintain business as usual at JAL as creditors and the government discuss the troubled company’s future. Bankruptcy contingency plans are understood to stretch to co-opting the Japanese diplomatic corps to man the phones at understaffed JAL offices worldwide. Embassies may also be used to soothe local suppliers that have payment concerns.
JAL’s future is being settled amid a maelstrom of competing interest groups. A state-backed turnaround group is investigating how the restructuring should be handled and is debating how much funding should come from the state purse. Some ruling party MPs have said that they favor liquidation. A trio of private sector creditors is keen to avoid that outcome.