JAL succumbs to bankruptcy

The axe has finally fallen at Japan Airlines (JAL) with the beleagured carrier filing for court-protected bankruptcy and turning to Japan’s state-owned 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 passengers’ 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.