TokyoTomo Travel Guide

Japan Airlines signed the loan agreement with Development Bank of Japan on November 24 to secure funds necessary for its uninterrupted flight operations, which is based on the “Measures for the Revitalization of Japan Airlines“ announced on November 10 by the related five ministers including the Chief Cabinet Secretary and the Minster of Land, Infrastructure, Transport and Tourism (MLIT). The measures are to grant absolute financial support for JAL to ensure the airline’s safe and uninterrupted flight operations during the company’s business restructuring. During the previous results briefing, the airline explained that it would need fund injection of approximately 125 billion yen by the end of fiscal year 2009 closing in March, 2010. It is assumed that Development Bank of Japan provided JAL some 100 billion yen in emergency loans. The airline expects to ask for the remaining approximately 25 billion yen through commercial banks.

The “Measures for the Revitalization of Japan Airlines” stipulates the following procedures. 1) In the event JAL advises MLIT of a possible interference of its flight operations, e.g., for the reason of cash shortage, should such an event occur, the Minister is to confirm, after consulting with the related ministers, that the customers’ convenience and corporate activities could be seriously affected. 2) Based on such confirmation, the Minister is to review the measures therein which include budget necessary for the adequate credit enhancement and its related legislative actions in terms of financing Japan Airlines through the respective financial organizations. The financing in the amount of 100 billion yen is expected to be government-backed.

Source: Travel Vision

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