2009-11-24

JAL's Debts Exceed Assets; Transport Minister Acknowledges

From Yomiuri Shimbun and Sankei Shimbun, 24 November

Minister of Transport, Seiji Maehara said he had been briefed on financial health of excessive debt Japan Airlines, in the process of corporate rehabilitation under public control, on both cases of the corporate liquidation and restructuring cases.

Maehara officially admitted a final report submitted on 29 Oct by JAL Rehabilitation Task Force that described JAL as the company is in excessive debt.

At Tokyo Stock Exchange, JAL stocks (code 9205) were traded with the lowest price of 86 yen per share in the morning of November 24. At the day's closing, the price was 87 yen down 8 yen or 8.42% from the last week.

One of decisive factors to ensure the company's comeback is to reduce its corporate pension scheme expenditure; JAL management proposed on November 23 to its pension recipients to reduce the amount by 30% for retirees and by 50% for would-be-retirees. However, the change should be endorsed by two thirds of all retirees of JAL and the market wonders if this is possible.

2009-11-23

Japan Chooses F-35

from Kyodo News Agency, 23 November

Ministry of Defense has started arrangement to introduce F-35 as its long-awaited FX, or next mainstay fighter aircraft. Starting full-fledged study from December, the Ministry will include relevant expenses such as contracting in its budget request for fiscal 2011, according to multiple sources of the ministry and Japan Self Defense Forces.

With China's procurement of the fourth generation fighters, the ministry has decided to increase Japan's air defense by introducing the stealth F-35, assuming to deploy about 40 aircraft.

Tokyo is trying to compile a new basic defense posture policy for force structure and its operations but it postponed to finalize previously in last December. It is expected to clarify to procure F-35 in its new policy.

Hatoyama administration will request FX research budget only in fiscal 2010 budget plans in accordance with the postponed defense policy definition.

However, within the government, there are some cautious opinion to F-35 as the aircraft is still in its development stage and its performance is yet to be confirmed, calling for postponing of the contracting to fiscal 2012.

2009-11-09

Tokyo Does Not Endorse JAL Financing


9 November 2009

From Yomiuri Shimbun


Regarding management rehabilitation of Japan Airlines, Prime Minister Yukio Hatoyama conferred with Vice Prime Minister Naoto Kan, Finance Minister Fujii, Minister of Land and Trasport Maehara at official residence of PM on 8th November.

JAL deadly needs emergency financing for keeping its operations, around 100 billion yen within this year, and the governemnt agreed on financing for JAL without the government guarantee with commercial banking consortium on November 9.

JAL's mid term business performance records will be announced on November 13 and that day would a decisive timing to finalize JAL corporate restructure plans.

At ministers' meeting on 8th night, Maehara, as chief of 'JAL Rehabilitation HQS' consisting of seven government divisions, made a presentation of the policy direction. One of the issues is to lower high amount of corporate pension scheme of JAL by legislative measure and the other is support the company financially by the use of public funding from tax revenue. Prime Minister Hatoyama expedited the team to compile a working plans.

The rescue financing was expected to be guaranteed by the government as 'crisis situations solution' but the government now has a different view to JAL's management ciris as 'structural' and not caused by rapid deterioration of economic situations; and the original plan to provide government guarantee was canceled as the government changed its perception toward JAL.

Comment: JAL stock price on November 9 was closed as 106 yen, down 3 yen or 2.75% from the previous week at TSE.

2009-11-08

SQ A330 Stuck On Runway in Nagoya




from Mainichi Shimbun

Around 8:25 a.m., November 7, a Singapore Ailines Airbus A330-300, 170 passengers and crew on board, landed on Chubu Inernational Airport (Centrair) became unable to taxi and stuck on the runway. The aircraft was towed and moved to passenger terminal. There was no injury to anyone on board. This trouble caused 20-minute closure of the runway and three flights were delayed as much as 15 minutes.

According to the Ministry of Land and Transport, the aircraft's head landing gear became malfunction to move left and right after the landing.

2009-11-03

JAL to Discontinue 16 Routes First by June '10




Deficit-ridden Japan Airlines is now studying suspend flight service of 16 routes of which 8 for domestic and 8 for international. The company is expected to formally decide the abolition of these air routes within this week. JAL has already requested official support from Japan Corporate Revitalization Support Platform (JCRSP), a public-private joint investment firm and it is expected to add more number of money-losing air routes to abolish as a part of the corporate rehabilitation plan to be made by the request of JCRSP.

Domestic lines under study are: Chubu-Kushiro, Chubu-Hananomaki, Chubu-Kumamoto, Kobe-Shin Chitose, Kobe-Tokyo Handa, Kobe-Naha, Kobe-Ishigaki, and Kita Kyushu-Naha. International lines currently under scrutinizing include Narita-Mexici City, Kansai-Hanzhou(China).