Troubled Japan Airlines Corp. is set to cut about 15,600 jobs, a third of its work force, and reject billion-dollar cash offers from Delta and American Airlines, as it files for bankruptcy and embarks on a government-led turnaround, reports said on Monday.
Under a rehabilitation plan now being hammered out by a State-backed corporate turnaround body, JAL would make the job cuts during the three fiscal years through March 2013, Kyodo News reported. The plan would include a fresh investment of 300 billion yen by the body and wipe much of its soaring debts under bankruptcy protection.
JAL’s shares, which have plunged in recent weeks, are to be delisted, the Asahi newspaper reported.
Officials at JAL, the transport ministry and the turnaround body could not be reached for comment Monday, a national holiday in Japan. The stock market was also closed.
The State-backed Enterprise Turnaround Initiative Corp. of Japan will decline cash offers from Delta and American Airlines as it fears giving foreign carriers a foreign stake in the company would complicate the restructuring, according to media reports.
Instead, the airline will pursue only greater cooperation with either Delta or American, the business daily Nikkei said on Sunday. The turnaround body will pick one of the U.S. carriers as JAL’s partner after February, it said.
Delta and its SkyTeam partners have offered $1 billion to JAL, while American, which partners with JAL in the oneworld alliance, has countered with a $1.4 billion.
JAL could file for bankruptcy as early as January 19, with company president Haruka Nishimatsu resigning soon after, reports said.
The Nikkei said Sunday the government and the turnaround body have asked Kazuo Inamori, founder of electronic component maker Kyocera Corp., to head JAL during the restructuring process. Inamori is to reply to the government by the end of the week.
Shares in JAL have tumbled and were off nearly 12 percent Friday at 67 yen. Friday’s finish marked a staggering fall from JAL’s closing price of 213 yen at the beginning of 2009.