Japan Airlines Files for Bankruptcy Protection

Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., has filed, jointly with the Development Bank of Japan (DBJ), Japan Bank for International Cooperation, Mizuho Corporate Bank, Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd. and Sumitomo Mitsui Banking Corporation, an application to the Enterprise Turnaround Initiative Corporation of Japan (ETIC) for support for restructuring.

In addition, JAL filed the petitions for commencement of corporate reorganization proceedings with the Tokyo District Court. The Court entered an order commencing the proceedings and appointed ETIC and Eiji Katayama, Esq. as reorganization trustees.

On Tuesday, the trustees obtained  comprehensive court approval authorizing JAL's continued payment of certain commercial transaction claims, including payments for fuel and other supplies and services, as well as leases and other related obligations. Also, JAL will be able to obtain the DIP financing from DBJ and ETIC, the amount of which, it says, will be sufficient for it to continue business.

The airline has also indicated that customers' airline tickets and frequent flyer miles will be fully protected and the frequent flyer program is expected to be continued as it has been conducted. The continuation of the group's flight operations are therefore, on the whole and in the short term at least, not expected to be interrupted. Established in 1953, the JAL Group operates around 1,100 daily regular flights.

Haruka Nishimatsu, the Representative Director and President, have resigned and it is also expected that all of the other directors will resign. The new management structure will be determined in early February. Meanwhile, it is expected that Masato Uehara, the Senior Managing Executive Officer, will be the Group Temporary Chief Operating Officer.

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