Stricken Japan Airlines has called for a government bail-out as it battles for survival.
The request was made by JAL president Haruka Nishimatsu at a meeting with Japan’s new transport minister, and would involve a radical restructure in addition to the recently-announced 6,800 job cuts.
Nishimatsu told reporters after the meeting with Transport Minister Seiji Maehara: “Ultimately, we think that the use of more funds will reduce our debts to the public.”
Shares in JAL sunk 18% to a record low on the news of the meeting, as well as fears that the company could ultimately be broken up.
Nishimatsu plans to apply for public funds under Japan’s industrial revitalisation law, which dictates that companies need to obtain approval from the government to restructure. They are then able to apply for bank loans, which are secured by the government’s Japan Finance Corp.
Recent media speculation has named several US and European airlines - including British Airways, Air France-KLM, Delta Airlines and American Airlines - as in the running to take a stake in JAL and expand into Asia via code-sharing agreements.
Mr Nishimatsu said last week that he hoped JAL would have a deal in place with an international carrier by the middle of October.
Asian-Pacific airlines have been particularly hard hit by the downturn. IATA predicts regional carriers will rack up losses of $3.6bn in 2009.