JAL nears the brink

JAPAN AIRLINES (JAL) last Thursday 24 September bowed to the inevitable and asked the Japanese government for a bailout following massive losses, and the accumulation of some $15bn of debt.  The timing could not have been worse with the Democratic Party of Japan, created in 1996, recently kicking out the incumbent Liberal Democrat Party which has been in power for over 50 years.  The new Transport Minister immediately set up a task force to review the situation but also made it clear that cost cutting measures by JAL was not sufficient.  JAL shares dropped dramatically but bankruptcy seems to be ruled out.  Delta Air Lines and a rival group of carriers led by American Airlines are holding separate talks to invest in and deepen ties with JAL, eyeing growth in Japan and the rest of Asia.  There is also talk of splitting JAL into "good" and "bad" parts, similar to the restructuring of US car maker automaker General Motors. www.jal.com

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