Japan Airlines has revealed a $1.5 billion loss as it struggles to recover from the travel industry’s deepest slump in years. The company is seeking government help to deal with creditors.
The airline has scrapped forecasts for the rest of the year due to uncertainty surrounding its turnaround efforts, which require a government bailout and are expected to involve thousands of job cuts and major route reductions.
The company is seeking loans of 125 billion yen ($1.4 billion) to maintain operations having posted a 32.1 billion yen ($356.7 million) loss for the second quarter through September, bringing its losses for the fiscal first half to 131.2 billion yen ($1.5 billion).
“Since the subprime crisis emerged, our business has been affected by drops in the number of business passengers as well as the emergence of the new type of influenza,” said JAL executive officer Yoshimasa Kanayama.
“The second half of the year is expected to remain severe.”
“I feel a sense of responsibility very keenly,” said JAL President Haruka Nishimatsu. “We want to come up with a recovery plan that the public will understand.”
JAL is in talks with both oneworld partner American Airlines and Delta from rival SkyTeam group on possible investments. American is rumoured to be considering a $300 million investment in JAL with private-equity fund TPG Inc.