Japan Airline's corporate rehabilitation process has come to complete on March 28 as it was decided by the Tokyo District Court. JAL got additional loan of about 255 billion yen (about $3 billion) from banks, that was used to repay its carryover debt of about 395 billion yen with its own cash. However, Japanese air traffic would be in a hard time after March 11 earthquake/tsunami and the accident at the Fukushima Daiichi nuclear plant and its path to growth again is not secured.
JAL had filed an application for the corporate rehabilitation process on January 19,2010; it had over 1 trillion yen debt back then and literally bankrupt. Its major transaction banks abandoned their loan armouring 520 billion yen. JAL completed a tough restructuring plan such as slashing off 16,000 employees as a whole group level, dropping unprofitable air routes and capacity cutting that had approval of the court in November 2010.
The global economic recovery worked positively for JAL to earn 175 billion yen operating profit in 11 months from April 2010 until February 2011. This better performance resulted in additional loans from the banks.
However, the post quake traffic is decreasing overall and Ken Onishi, President of JAL, revealed its domestic demand is 28% off while international demand is 25% down.Kazuo Inamori, Chairman, is confident to run JAL better now by seeing profitability by air route, though he expects lowering of the corporate performance is unavoidable.
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