International Routes Would Be Taken Over By ANA

The Japanese government is considering a massive restructuring of Japan Air Lines (JAL) that would strip the carrier of its international operations in hopes that it could survive as a domestic carrier. The international routes would be absorbed by rival All Nippon Airways (ANA).

The international news service AFP cites a report in the Japanese newspaper the Mainichi Shimbun that indicate the a program to restructure JAL's financial situation was a topic for discussion during a meeting Wednesday of high Japanese government officials, including Transport Minister Seiji Maehara. The Transportation Ministry reportedly is adamantly opposed to the scheme.

An unnamed JAL executive told the paper that the airline would be "a good company" if it concentrated on domestic routes.

Maehara also met last weekend with vice Prime Minister Naoto Kan and other officials, producing a agreement to expand loans from the state-run Development Bank of Japan beyond the original $1.08 billion. JAL continues to be courted by both American Airlines and Delta for codesharing arrangements in the Japanese market. Both have offered significant financial assistance to the struggling Japanese carrier.

AFP reports that JAL had lost over $1.5 billion through September of last year, and plans significant job cuts and other cash-saving measures in an effort to get back in the black.

FMI: www.jal.com, www.mlit.go.jp/index_e.html