23 Jun 2009

Japan Airlines to receive bailout

6:49 am on 23 June 2009

The Japanese government is ready to make an emergency loan to the country's biggest airline, Japan Airlines.

The BBC reports it could receive up to 100 billion yen ($US1 billion) in state aid, on condition that the airline's management improves.

Any loan would be made through state owned Development Bank of Japan.

Earlier this year JAL looked to borrow up to 200 billion yen from a government low-interest loans scheme.

Finance Minister Kaoru Yosano has suggested that Government support for JAL would encourage commercial banks to lend to the airline, but the airline "must do its best" to improve management.

In February JAL predicted an annual loss of 34 billion yen as the global crisis hit demand.

JAL said it hoped to publish a new business plan as early as possible, reflecting the government's help.

Earlier this year the airline launched a programme of job cuts, plans for fuel-efficiency and a focus on business customers.