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.