Japan Airlines, Asia's biggest carrier, said on Friday that it lost $US1 billion in the last quarter as the global economic downturn and swine flu fears triggered a severe slump in demand.
The airline made a loss of 99 billion yen ($US 1 billion) during the May quarter, down from a 3.4 billion yen loss a year earlier.
The figures come as Japan's government prepares to provide an emergency loan to the carrier, the BBC reports.
JAL could receive up to 100 billion yen in state aid, say reports, providing the airline's management improves.
Any funding would be provided through state owned Development Bank of Japan.
Earlier this year, JAL sought to borrow up to 200 billion yen from a government low-interest loans scheme.
The carrier saw sales drop 32% to 334.9 billion yen from a year before.
JAL is maintaining its forecast for the fiscal year to March of a 63 billion yen net loss.
The airline said it would reduce flights on eight international routes within Asia from 25 October and suspend services between Nagoya in central Japan and Paris as well as between Nagoya and Seoul, AFP reports.
It will also cut the number of flights on six domestic routes and downsize to smaller planes on 14 international passenger routes and one domestic route.
