JAL files for bankruptcy, no immediate impact in islands - Hawaii News Now - KGMB and KHNL

JAL files for bankruptcy, no immediate impact in islands

TOKYO (HawaiiNewsNow) – Asia's largest carrier, Japan Airlines (JAL) has filed for bankruptcy protection in one of the biggest corporate failures in Japanese history. A state-backed corporate turnaround agency said Tuesday it received confirmation from JAL that it had applied for protection from creditors under the Corporate Rehabilitation Law - Japan's version of Chapter 11.

The airline was saddled with debts of $16.5 billion, falling passenger traffic and growing pension costs.

"Japan Airlines stock back in March was trading for 200 yen a share. Now its five yen a share and still plunging. The market obviously thinks we are going to this bankruptcy filing" said Hawaii News Now business reporter Howard Dicus.

JAL will now embark on a massive overhaul under a restructuring plan to shed the fat and inefficiency that undermined its finances.

"The new management expected after the bankruptcy filing is not expected to make wholesale changes to Hawaii's service. But there is always the risk of something incremental, depending upon what their cash flow is" said Dicus.

Copyright 2010 Hawaii News Now. All rights reserved.

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