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Done and Done: Japan Airlines Going Into Bankruptcy

January 11, 2010 at 11:39 AM | by | Comment (1)

This time last week there were a wealth of confusing options for keeping Japan's troubled flagship carrier, Japan Airlines, out of bankruptcy. There was talk of bankruptcy-avoiding restructuring. There was talk of a kind of half-bankruptcy where the airline would stay listed on the Tokyo Stock Exchange. There was talk of a government bailout. And the conclusion? Nope and nope and nope.

The sixth-largest bankruptcy in the history of Japan—a country which, we'll remind you, is something more than a bit player in the global economy—is set to happen and it's set to happen soon:

A final decision on the future of Asia’s largest carrier, founded in 1951, may be made this week, and a bankruptcy filing will follow next week, according to three people familiar with the situation. The finance ministry and the Tokyo-based carrier’s biggest lenders all favor a court restructuring, according to people familiar with the matter.

On top of all the economic implications—and we'll get to those in a second—this is a nice little reminder that elections matter, even for travelers. Hatoyama is the first Japanese Prime Minister in over a decade to come from outside the Liberal Democratic Party, and he was determined to do something about government spending. Fast forward a few months later and suddenly the Asian air market is on the verge of total disarray because of his no-more-bailouts decision.

JAL will obviously keep running, although what's obvious to US passengers is going to take some explaining in Japan. US travelers have become pretty used to flying on airlines mid-bankruptcy, especially since 9/11. It's a little different in Japan and there are serious concerns that people just won't know that the airline is still operating.

We'll make sure to keep you updated about any cuts, route changes, etc as they crop up. Which they will, probably confusingly.

[Photo: Tennen-Gas / Wiki Commons]

Related Stories:
· U.S. Fliers Unlikely to Shun Japan Airlines in Bankruptcy [Business Week]
· Japan Airlines [Jaunted]
· Airline Industry [Jaunted]

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Financial Education

We cannot deny the fact that even one of the richest countries in the world is also affected of the recession. Japan is one of it and it says that Japan will going into bankruptcy. Financial education is also one of the problems that most of us faced. One wonders if everyone gets a financial education as good as they should - whether it's from public or private schools, or from their parents.
DayanaR on January 14, 2010 at 12:27 AM #Permalink

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