JAL Task Force Mulls Over Rehab Plan

The government task force crafting rehabilitation plans for Japan Airlines Corp. is asking the Development Bank of Japan to provide more than 50 billion yen in debt waivers and debt-for equity swaps, according to Nikkei. With a public fund injection being considered as a likely option, the task force is pressing creditors to agree to debt relief so that a viable rehabilitation plan can be hammered out for the beleaguered airline operator. Under the rehab plan, JAL would pare back 45-50 loss-laden domestic and overseas routes by the fiscal year ending March 31, 2015. In addition, the airline would be forced to slash its work force by nearly 9,000 and halve its subsidiaries and affiliates, which totaled around 290 firms as of March 31. JAL's lenders are pressuring the task force to lobby the government to lower Japan's airport usage fees and other charges that are high compared to overseas counterparts.