Japan's new government said Wednesday it stood ready to support struggling Japan Airlines in the case of a financial emergency, seeking to allay growing worries about the carrier's future. "I believe the rehabilitation of JAL is more than possible," Transport Minister Seiji Maehara said at a news conference.
"In the case of emergency, the government will back up JAL to prevent its operations from being disrupted or its capital flow from being blocked," he said, reiterating that Asia's largest carrier would not be allowed to collapse. Prime Minister Yukio Hatoyama said separately that the government would not allow any disruption to JAL flight operations.
"The government will have to make sure that the carrier never gets in trouble when operating flights," Hatoyama told reporters. "If it becomes a financial emergency, the government will have to consider reaching out."
The assurances came after two incidents were reported overseas - one in which a credit card company said it would not allow purchases of JAL tickets and another in which an insurer refused to cover trips with the airliner. "Foreign financial institutions are feeling excessive concerns about JAL," Maehara said.
Japan's centre-left government launched a task force last week to map out the carrier's basic rehabilitation plan by the end of October, promising to overhaul the JAL restructuring set in motion under the previous administration. The five-member panel was created a day after JAL sought another public bailout to survive after being hit by the economic downturn.
JAL, which lost more than one billion dollars in the April-June quarter, has announced plans to slash 6,800 jobs and pursue a tie-up with a foreign carrier as part of efforts to return to profit. But Maehara said last week JAL's business revival plan was "insufficient" and the government was not in a position to inject more government funds. The carrier has already received three government bailouts since 2001. JAL has forecast a net loss of 63 billion yen (700 million dollars) in the year to March 2010, after a 63.2-billion-yen deficit last year.
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