JOIN USJAL, Asia’s largest airline by revenue, applied in October for help from the Enterprise Turnaround Initiative Corp of Japan (ETIC), a body of turnaround specialists established to bail out companies with state-guaranteed funding.
The ETIC has discussed with JAL’s creditors the possibility of using a Chapter 11-style bankruptcy procedure if it decides to support the carrier, but has not ruled out a restructuring outside of bankruptcy court, the two sources said. The sources spoke on condition of anonymity given the sensitivity of the matter. The ETIC and JAL declined to comment.
The ETIC also met with JAL over the weekend and explained that bankruptcy was being considered as an option, sources said. The ETIC is expected to make a final decision on whether to support JAL with loans and investments next month. It is saddled with some $15 billion in debt. If it fails it would be one of Japan’s largest bankruptcies in recent years.