JAL is going bankrupt, recovery my foot!

[jumpmrt]

There will be rounds and rounds of down turns in the line and coming.

http://news.yahoo.com/s/afp/20091230/bs_afp/japanairlinecompanydistressstocksjal


Japan Airlines shares dive on bankruptcy fears
AFP


32 mins ago

TOKYO (AFP) – Fears deepened Wednesday about the future of debt-ridden Japan Airlines, with shares in Asia's biggest carrier plunging by a quarter on fears it might file for bankruptcy, dealers said.

JAL, battered by the global recession and swine flu pandemic, is scrambling to slash costs and seeking its fourth government bailout since 2001 to keep flying in the face of mounting losses.

Media reports that bankruptcy is one option for the cash-strapped carrier have spooked investors, who sent shares in the airline crashing 25 percent to 66 yen in morning trade, after an 8.3 percent dive on Tuesday.

The shares slid to 60 yen at one point, the lowest level since JAL merged with Japan Air System Co. in 2002.

"Speculation is rife that JAL may face court-led proceedings, which could result in its delisting" from the Tokyo Stock Exchange, said Kazuhiro Takahashi, equity information chief at Daiwa Securites SMBC.

"We have the impression that somebody needs to take responsibility in order to move JAL's restructuring plans forward. Worries are growing among shareholders," he said.

Local media have reported that the state-backed body overseeing JAL's restructuring is considering filing for protection from creditors as one possibility for the cash-strapped carrier.

Bankruptcy protection can enable a company to restructure its debts with creditors and implement other measures to emerge stronger, as seen with ailing US auto giant General Motors.

But it can also mean that shareholders will see the value of their investment wiped out.

JAL, which lost about 1.5 billion dollars in the six months to September, has said it plans thousands of job cuts and a drastic reduction in routes as part of its efforts to return to profitability.

It has been offered financial assistance by both American Airlines and Delta Air Lines, who are competing to take a minority stake in the Japanese carrier, eyeing its coveted Asian landing slots.

Japan's government has ruled out allowing JAL to collapse, but has left the door open to possible bankruptcy proceedings to allow the group to restructure more easily.

The global economic downturn has dealt a heavy blow to JAL's efforts to recover from a long period of financial turbulence stretching back to its privatisation more than two decades ago.

 

[shOUTloud]

JAL is a bit different cos they are forced by the Jap govt to fly to ulu places in Japan to keep the regional airports going. I am not sure whether Japan has LCCs but they should let the LCCs take over the ulu routes so that JAL can survive.

 

[VeryWise]

Yes, shoutLoud is right. The airline industry is a very peculiar sector. A lot of National carriers struggle to survive because of the obligation to fly to ulu domestic airports, where some of the traffic is not enough to support a regular airline. Politically, the airlines have to provide a mean of convenience to the people. Unless these National carriers could downgrade their image to fly no-frill flights to ulu places, it is hard for them to survive. It might be a little too late for JAL but I guess if they could restructure and perhaps form a smaller susidary that concentrate on low cost air travel, they might have a higher chance to survive. Then again, I do not know enough of the Japan domestic market. It could be that service is still top prority and a no-frill flight will just not take off. Enlighten me if you can.

 

[jumpmrt]

Yes, shoutLoud is right. The airline industry is a very peculiar sector. A lot of National carriers struggle to survive because of the obligation to fly to ulu domestic airports, where some of the traffic is not enough to support a regular airline. Politically, the airlines have to provide a mean of convenience to the people. Unless these National carriers could downgrade their image to fly no-frill flights to ulu places, it is hard for them to survive. It might be a little too late for JAL but I guess if they could restructure and perhaps form a smaller susidary that concentrate on low cost air travel, they might have a higher chance to survive. Then again, I do not know enough of the Japan domestic market. It could be that service is still top prority and a no-frill flight will just not take off. Enlighten me if you can.

If the ECONOMY have got healthy strength in positive mode, the transportations or commutations will only bring positive result to change the ULU places towards becoming DEVELOPED and BUSY places.

When ECONOMY is FUCKED UP, then eventually you will see originally Developed and Busy places becoming Ulu. Just like what you see in Singapore heartland areas where HDB had DEMOLISHED thousands of shops Once Busy but became too Ulu and thus Vanished.

When healthy economy was in place, the providence of air / sea / land transportation will only assist and enhance the developments to bring economies into higher speeds.

Except for India & PRC nothing much like that is still happening in Asia.

What used to be called Asia's 4 little dragons became 4 dying worms.