13 Jan 2010

Japan Airlines offered funding boost

7:37 pm on 13 January 2010

American Airlines and its partners have offered the ailing Japanese carrier Japanese Airlines (JAL) $US1.3 billion in financial aid.

As fears grow that Asia's biggest airline is close to filing for bankruptcy, managers are trying to restructure JAL by cutting about a third of its 49,000-strong workforce.

The airline has a rival offer of support from the US company Delta Airlines, which is offering $US500 million and wants JAL to join its SkyTeam network, the BBC reports.

American Airlines wants JAL to stay with the Oneworld alliance that American is also a member of, along with British Airways and Qantas.

Meanwhile, JAL's current and former employees have agreed to cuts in the company's pension scheme payouts. The fund has a $3.6 billion deficit.

Those cuts are crucial to the company gaining any government support.

On Wednesday, Japan Airlines shares plunged 81% to just 7 yen a share, hit by a flood of sell orders on fears the ailing carrier will be delisted from the bourse and file for bankruptcy to aid its restructuring, AFP reports.