The long-awaited radical restructuring of Japan Airlines finally got under way on January 19th, when JAL and two core units filed for bankruptcy protection under the Japanese Corporate Reconstruction Act. The chances are that the restructuring will be a success, enabling JAL to re-emerge as a lean and strong competitor with a healthy balance sheet. It looks similar to a pre-packaged airline Chapter 11 case in the US, except for the government involvement. JAL's reorganisation is overseen by the state-backed ETIC (Enterprise Turnaround Initiative Corporation of Japan) in co-operation with the state-owned Development Bank of Japan (DBJ) and other major creditor banks. The court named ETIC as the trustee, in full control of the JAL companies during the reorganisation.
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