Japan's Government is in favour of Japan Airlines (JAL) entering bankruptcy, and will likely reject offers of financial aid from American Airlines and Delta Air Lines, say Japanese media reports.
Citing unnamed government officials, the reports say JAL is likely to enter bankruptcy as part of its financial turnaround plan.
The Government will also likely reject the proposals from American and Delta because its top priority is to install a new management team at JAL and restructure the business, say the reports.
American and Delta have offered to invest money into JAL, in return for access to the Japanese market and JAL's routes into Asia.
JAL last year turned to the government for financial assistance after posting large losses.
The government is grappling with whether to restructure JAL via bankruptcy or restructure the business out-of-court.
JAL's private financial creditors, such as Mizuho Corporate Bank and Sumitomo Mitsui Banking Corporation, support an out-of-court solution. But the state-backed Enterprise Turnaround Initiative Corporation reportedly prefers a financial bail-out that involves JAL having bankruptcy protection.
Source: Air Transport Intelligence news
