JAPAN: JAL succumbs to bankruptcy protection

In one of Japan’s biggest corporate failures, Japan Airlines has applied for protection from creditors under the Corporate Rehabilitation Law — Japan’s version of the US’ Chapter 11 — with the Tokyo District Court. The axe has finally fallen at Japan Airlines (JAL) with the beleaguered carrier filing for court-protected bankruptcy and turning to Japan’s […]


In one of Japan’s biggest corporate failures, Japan Airlines has applied for protection from creditors under the Corporate Rehabilitation Law — Japan’s version of the US’ Chapter 11 — with the Tokyo District Court.

The axe has finally fallen at Japan Airlines (JAL) with the beleaguered carrier filing for court-protected bankruptcy and turning to Japan’s stateowned Enterprise Turnaround Initiative Corporation (ETIC) for restructuring support. In one of Japan’s biggest corporate failures, JAL applied for protection from creditors under the Corporate Rehabilitation Law — Japan’s version of the US’ Chapter 11 — with the Tokyo District Court.

ETIC has confirmed that it will provide the necessary support to JAL during the restructuring, and that it has brokered the funds required for the continued protection of commercial transaction claims; for the protection of passenger’s frequent flyers programme; and the protection of its aircraft leasing fees.

In addition, JAL will also be eligible for debtor-in-possession (DIP) financing from ETIC and the Development Bank of Japan (DBJ) for other expenses needed to keep the airline flying.

“The financial crisis that occurred in the fall of 2008 pushed the world economy into an unprecedented global recession and JAL Group also suffered a significant decline in sales due mainly to a decline in demand for international passenger service for business users and a sudden decline in demand for international cargo service,” JAL said in a press statement.