Efforts to save Japan Airlines Corp. have been boosted by an agreement between the airline and its banks on huge debt waivers.
According to sources, the rehabilitation plan for the bankrupt airline centers on getting the banks to write off about 520 billion yen ($5.95 billion) in loans. An additional 350 billion yen in public funds is expected to be plowed into the company.
JAL and the Enterprise Turnaround Initiative Corp., which is overseeing the rehabilitation plan, initially asked the airline's main banks to forgive 90 percent of the money owed them.
The banks resisted, saying they were being asked to shoulder a disproportionate burden. They pointed out that fuel charges owed to other businesses were fully protected when JAL went bankrupt in January, because of the need to keep planes flying.
The two sides appear to have reached agreement last week on a slightly reduced waiver, amounting to 87.5 percent of the loans. This lightens the banks' burden by about 20 billion yen.
With the compromise in place, JAL and the enterprise turnaround corporation now expect to submit a rehabilitation plan to the Tokyo District Court in late August.
Japan Airlines was 950 billion yen in debt at the end of March 2010, the result of sagging passenger numbers and a large fleet of outdated, fuel-guzzling and inefficient aircraft such as the Boeing 747.
JAL and the enterprise turnaround corporation hope to get JAL out of the red by the end of the current fiscal year.
http://www.asahi.com/english/TKY201007250281.html
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