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Saturday, Sept. 26, 2009
Another JAL rehab task force launched
The transport ministry launched a new task force Friday to help Japan Airlines Corp. fundamentally revise its turnaround plan by the end of November.
The task force, which will submit an outline of the new restructuring plan by the end of October, consists of five experts on corporate restructuring, including team leader Shinjiro Takagi, a special adviser to Nomura Securities Co. and former chairman of the Industrial Revitalization Corporation of Japan.
"JAL is the main body that will create the rehabilitation plan, but we will check whether it is fair and feasible from the viewpoints of third parties, experts and ordinary citizens," Takagi said at a news conference.
The team will also send another 20 to 30 experts to examine the debts and assets of the ailing flagship carrier, which posted a record group net loss of ¥99.04 billion in the April-June quarter.
Asked if the task force will propose a change of management at JAL, Takagi said it is one option that will be examined but added that the team must first get a detailed grasp of the company's internal situation before making such a proposal.
Later in the day, transport minister Seiji Maehara said the task force was established to come up with a rehabilitation plan free of constraints from involved parties. JAL's current turnaround proposals lack specifics and its feasibility is in doubt, he said.
JAL received emergency loans in June from several financial institutions, including the government-backed Development Bank of Japan, and is obliged to submit a rehabilitation proposal to the ministry by the end of this month.
But an outline of the restructuring steps JAL has proposed so far, including the elimination of 6,800 jobs and 50 routes, is far from satisfactory, Maehara said.
"When we held a hearing with JAL, I myself had doubts about the timeline and feasibility, and the banks that have been providing financial support seemed to have the same thought," Maehara said.
JAL thus needs to revise its plan with the help of professionals and its creditor banks, Maehara said.
Under the Liberal Democratic Party-New Komeito government, the transport ministry had a different panel of private-sector experts delving into JAL's problems, but Maehara abolished the panel when he took over as minister last week.
The new task force is expected to propose more drastic measures than the previous panel, which did not plan to send any staffers to JAL.
JAL President Haruka Nishimatsu met with Maehara Thursday and requested a capital injection of public funds under the industrial revitalization law to keep the company afloat.
JAL is negotiating a possible capital tieup with Delta Air Lines Inc., American Airlines Inc. and other foreign airlines as possible survival options.