JAL files for corporate bankruptcy

Japan Airlines has filed for bankruptcy court protection, and will receive full support from the state-backed corporate turnaround body for its rehabilitation.

The airline sought help from the Enterprise Turnaround Initiative Corporation, which is partially funded by the government, after running into financial difficulties last October.

Last week, the government, the corporation and JAL's main creditor banks agreed that the airline must undergo court-led bankruptcy proceedings to receive the corporation's help.

JAL approved the measure at its board meeting on Tuesday, and filed for court protection from creditors under the Corporate Rehabilitation Law.
The Tokyo District Court approved the start of the procedures.

The JAL Group is saddled by debts of more than 22.8 billion dollars as of the end of September, making it the biggest nonfinancial corporate failure in Japan.

The turnaround body has pledged full support for the airline as its court-appointed trustee.

The body will provide JAL with credit worth about 6.6 billion dollars from the state-backed Development Bank of Japan and other institutions, while offering about 3.3 billion dollars of its own funds.

JAL President Haruka Nishimura will be replaced by Kazuo Inamori, the founder and honorary chairman of electronic components maker Kyocera Corporation. Inamori will become the airline's CEO.