Trading conditions "extremely severe"
Japan Airlines (JAL) today (November 13) reported a net H1loss of €975m (131.2bn yen), compared to a €272m (36.6bn yen) profit for the same six months last year.
It said that during the six month period to the end of September, revenue had dropped by €2.3bn (309.6bn yen) from 2008 figures to €5.7bn (763.9bn yen) this year.
The airline said trading conditions during the six months were "extremely severe."
It cited the "unprecedented economic meltdown" and the global outbreak of H1N1 flu as major factors causing an "economic sluggishness both internationally and domestically that adversely affected travel".
During the period, JAL said it has done its "utmost" to improve profitability.
Measures have included a cut in operating costs of €1.4bn (183.6bn yen) to €6.4bn (859.7bn).
These included suspending routes, cutting frequencies, using smaller aircraft and cost cutting wherever possible.
It said it had now asked for aid from the government which said earlier this week it would announced a rescue plan.
Any re-structuring plan is likely to include 9,000 redundancies, the axing of 50 routes and a pay and pensions freeze.
There has also been reports that a new plan would include the standing down of the current airline president Haruka Nishimatsu.
JAL also needs to deal with creditors which include the state-owned Development Bank of Japan, the Mizuho Corporate Bank, the Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation.
The airline said it needed a loan of €1.34bn (180bn yen) as it could run out of cash by November.
There is also speculation that JAL will resume talks with American Airlines, a fellow member of the oneworld alliance, and Delta Air Lines, from the rival SkyTeam alliance, about one buying a stake in the carrier.
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