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Government bail out planned for carrier
A new rescue plan is to be drawn up to save Japan Airlines (JAL).
The Japanese government has ordered a team of officials from its transport ministry to work out a new scheme after previous rescue packages have been rejected.
The new team was due to hold its first meeting today (October 30).
The struggling carrier said it would also apply for aid from the state-backed Enterprise Turnaround Initiative Corporation (ETIC).
The airline is understood to need a loan of about JPY180bn (€1.34bn) as it could run out of cash by November, Reuters reported.
Seiji Maehara, the Japanese transport minister, said today the government would "do its best" to ensure the running of the country's national carrier.
JAL's creditors rebuffed its previous Y600bn (€4.5bn) rescue plan earlier this month.
The plan would have granted the airline up to €2.25bm (Y300bn) in debt waivers or debt for equity swaps.
The airline's main creditor is the state-owned Development Bank of Japan with others including the Mizuho Corporate Bank, the Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation.
The plan included plans for 9,000 redundancies, the axing of 50 long haul flights and a pay and pensions freeze.
It also included the possibility that the airline's president Haruka Nishimatsu might stand down.
JAL received a loan of $1.1bn earlier this year to help it with its deficit from the previous Japanese government.
It has also been in talks - now on hold - with two US carriers, Delta Air Lines and American Airlines, a fellow member of the oneworld alliance about a possible cash injection of $300m.
JAL lost $692m last year and announced a $1bn loss for the quarter to June this year.
It is heading for a deficit of $700m for the financial year ending next March.
www.jal.com www.aa.com www.delta.com