Hamfighter
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Japan Airlines scores deal with Delta: report
TOKYO (MarketWatch) - Shares of Japan Airlines dropped more than 14% Monday morning in Tokyo, as a reported alliance with Delta failed to provide support for the stock a day ahead of an expected bankruptcy filing by the ailing carrier.
Japan Airlines on Friday reached an agreement on a comprehensive tie-up that mainly features code-sharing flight services, the Yomiuri Shimbun reported Saturday, citing company sources.
The tie-up would require JAL to switch to the SkyTeam group alliance to which Delta belongs, from JAL's current Oneworld airline alliance.
The two airlines are likely to officially sign the deal after it's endorsed by new JAL top management to be inaugurated after the JAL group applies for the application of the Corporate Rehabilitation Law, the Yomiuri Shimbun report said.
JAL is expected to file for bankruptcy protection Tuesday.
The airline has also devised a plan to cut operating costs by 25% over the next three years, the Nikkei business daily reported Sunday.
The state-backed Enterprise Turnaround Initiative Corp. of Japan hopes to complete the airline's turnaround by fiscal 2012, the report said, adding that JAL will cut its payroll by 15,000 people over the next three years and attempt to bring down jet fuel costs by 30% in the same amount of time.
All told, JAL's goal is cut operating costs to 1.24 trillion yen in fiscal 2012, down 25% from the current fiscal year, the Nikkei report said.
The carrier is expected to log an operating loss of more than 260 billion yen ($2.9 billion) for the year ending in March of this year and, after the bankruptcy filing, it expects to return to an operating profit in fiscal 2011 through drastic restructuring, according to the report.
Shares of JAL fell 14.3% in Monday morning trade to 6 yen.
Myra P. Saefong is MarketWatch's assistant global markets editor, based in Tokyo.
TOKYO (MarketWatch) - Shares of Japan Airlines dropped more than 14% Monday morning in Tokyo, as a reported alliance with Delta failed to provide support for the stock a day ahead of an expected bankruptcy filing by the ailing carrier.
Japan Airlines on Friday reached an agreement on a comprehensive tie-up that mainly features code-sharing flight services, the Yomiuri Shimbun reported Saturday, citing company sources.
The tie-up would require JAL to switch to the SkyTeam group alliance to which Delta belongs, from JAL's current Oneworld airline alliance.
The two airlines are likely to officially sign the deal after it's endorsed by new JAL top management to be inaugurated after the JAL group applies for the application of the Corporate Rehabilitation Law, the Yomiuri Shimbun report said.
JAL is expected to file for bankruptcy protection Tuesday.
The airline has also devised a plan to cut operating costs by 25% over the next three years, the Nikkei business daily reported Sunday.
The state-backed Enterprise Turnaround Initiative Corp. of Japan hopes to complete the airline's turnaround by fiscal 2012, the report said, adding that JAL will cut its payroll by 15,000 people over the next three years and attempt to bring down jet fuel costs by 30% in the same amount of time.
All told, JAL's goal is cut operating costs to 1.24 trillion yen in fiscal 2012, down 25% from the current fiscal year, the Nikkei report said.
The carrier is expected to log an operating loss of more than 260 billion yen ($2.9 billion) for the year ending in March of this year and, after the bankruptcy filing, it expects to return to an operating profit in fiscal 2011 through drastic restructuring, according to the report.
Shares of JAL fell 14.3% in Monday morning trade to 6 yen.
Myra P. Saefong is MarketWatch's assistant global markets editor, based in Tokyo.
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The agreement is not official yet....
