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Wednesday, September 30, 2009

Japanese government got JAL's back

To end the "excessive anxiety" over Japan Airlines' fate, Japan aviation minister Seiji Maehara told the press that the Japanese government will step in to save JAL in the worst case.

Maehara set up a new 5-member panel to draft a new restructuring plan after JAL's own plan fails to satisfy him and pushed the deadline of finalizing the restructuring plan by two months to November. Even though he has stated he won't let JAL go into bankruptcy before, the anxiety over JAL's fate keeps growing and this is not helping JAL.

According to Bloomberg

“Some overseas financial institutions have excessive concern about Japan Airlines,” Maehara said, citing a travel insurance company that has excluded coverage for the carrier’s flights and a British bank that has refused credit-card payments for Japan Air tickets, without naming the companies.

...

The company, which is planning to eliminate 6,800 jobs by 2011, has enough cash to get through December, Maehara reiterated today.

As a result, Maehara reiterates that the Japanese government will support JAL in the worst case but he believes JAL is capable of saving itself.

According to Reuters,

"I believe JAL still has more than enough reserve power, but in case the worst happens, the government will support," Maehara told a news conference on Wednesday.

According to Nikkei.com,

The minister said, "It's the government's responsibility to completely wipe out harmful rumors or excessive worries about JAL."

He added, "Should the carrier be negatively affected by rumors about it, the government will do its utmost to ensure there is no impact on JAL's flight operations and cash flow."

JAL has made a statement (in Japanese) on its website, but it looks like it has more to do with JMB. Are there rumors about cut back in JMB too?

Hopefully this will help JAL a bit. But they will have to come up with a plan ASAP. Because of all those evil rumors, there are people who just don't want to book on JAL because they don't want the risk of their flights being canceled in the last minute due to frequency reduction or route suspension. And to the British bank and travel insurance company, you are NOT getting my business.

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