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Thursday, September 24, 2009

Aviation minister and lenders not happy with JAL's plan

Japan Airlines CEO presented the restructuring plan to the new Japan Aviation Chief on Thursday but it failed to satisfy him and some other government officials.

According to Bloomberg,

Japan Airlines Corp., seeking a fourth state bailout since 2001, failed to satisfy government officials or lenders with a turnaround plan, Transport Minister Seiji Maehara said.

A final decision on the proposal and a request for funds will be made in consultation with Prime Minister Yukio Hatoyama, Maehara told reporters in Tokyo today after meetings with the airline and banks. The carrier hasn’t been asked to file a new plan, he added.

So they are unsatisfied with the plan but are willing to settle with whatever JAL has right now and go ahead to ask the Prime Minister for approval? That doesn't sound right to me. I know time is running out, but couldn't they just tell JAL which part they don't like and tell them to fix it and fund them until then? If there's a fundamental problem in JAL and the plan does not address that, we will only see JAL getting into trouble once again in the future. Especially since JAL is requesting for public funding now, this sounds kind of irresponsible to me.

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