The Japan Government has formed a committee of top officials to focus on strategies for a turnaround at struggling Japan Airlines, the transport minister said on Friday.
Japan’s largest airline, suffering deep losses from declining travel and bloated costs, is moving closer to a multibillion dollar bailout and massive job cuts, after a separate panel recommended on Thursday that the company apply for access to emergency public and private funds.
The new committee, to hold its first meeting Friday night, will be headed by Transport Minister Seiji Maehara and include high-ranking representatives from other ministries.
“To insure that Japan Airlines runs smoothly through its restructuring, the government will provide support through this body,” he said.
Mr. Maehara has said the government will support JAL because it operates more than half of domestic flights and serves as an important transport function for the economy.
On Thursday, a government-appointed panel said the airline needs to reduce the number of airplanes and other equipment, cut its work force, reduce the number of flights and slash so-called legacy costs, which include pension payments.
The panel said any rehabilitation would be costly, and Japanese media reports say it will require 300 billion yen ($3.3 billion) in public funds, another 250 billion yen ($2.8 billion) in bank loans, as well as scrapping of nearly 50 flight routes and cutting 18,000 jobs, or 40 percent of its work force.
On the stock market on Friday, JAL was up 1.7 percent at 117 at the midday break.
