Published on Fri, Nov 13, 2009 at 14:41 | Source : Reuters
Updated at Fri, Nov 13, 2009 at 15:10
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JAL falls to Q2 loss, poor visibility ahead
Japan Airlines, which is seeking a state bailout, sank into the red last quarter as the economic slowdown hit travel and cargo demand, and it said it had applied for mediated debt restructuring.
Japan Airlines, which is seeking a state bailout, sank into the red last quarter as the economic slowdown hit travel and cargo demand, and it said it had applied for mediated debt restructuring.
Saddled with USD 15 billion in debt, a massive pension deficit and dozens of unprofitable flight routes, JAL is now seeking its fourth state bailout since 2001.
Asia's largest carrier by revenue said in its earnings report that there was a great deal of uncertainty about its ability to continue as a going concern. It has applied for help to the Enterprise Turnaround Initiative Corp, a government-backed turnaround fund.
JAL fell to a group net loss of 32.2 billion yen (USD 357 million) in the July-September quarter after reporting a 40.1 billion yen profit a year ago.
Quarterly revenues dropped 26% to 429 billion yen.
"We have a relatively big exposure to international business, and this sector was hit really hard by the global economic downturn," JAL President Haruka Nishimatsu told a news conference on Friday.
"I think we'll need to push forward the downsizing of our international business."
The struggling carrier, which earlier this year projected an annual net loss of 63 billion yen, did not give forecasts for the year due to uncertainties over its business outlook.
JAL applied for a debt restructuring scheme under which a third party will mediate between the company and its creditors.
