JAL will seek state aid

JAL will seek state aid

Japan Airlines Corp has confirmed it will apply for assistance from the state-backed Enterprise Turnaround Initiative Corporation (ETIC).

ETIC is able to tap up to 1.6 trillion yen in state-guaranteed funds until next March, but it remains to be seen how much JAL may be given.

Japan Airlines recently announced plans to cut 6,800 jobs to save money. But the Kyodo news agency reports that JAL had decided to raise the number of jobs it would cut to 13,000 jobs. The company made a loss of 99bn yen ($1.08bn; £661m) between April and June.

Hit by falling passenger numbers and high oil prices, the firm has been in severe financial trouble for some time, and its debts are said to total $15bn.

The ETIC has been given the power to buy the debt of companies in trouble, and send in turnaround specialists to help them restructure their operations.