Ailing JAL seeks tie-up with low-cost carriers

October 17, 2009 06:19:23 PM

• A⁺ 
• A^-
• |
• 
• |
• 
• |
• 

Struggling Japan Airlines is seeking a tie-up with low-cost carriers for its Asian operations, a report said Saturday.

JAL, looking for another public bailout to keep flying, is putting together an emergency turnaround plan under the supervision of a government task force.

In its cost-cutting efforts, JAL will expand code-sharing operations with budget carriers in Asia, replacing its less profitable flights for tourist destinations, such as Hawaii, Thailand and Indonesia, the Asahi daily reported.

The move would enable JAL to focus on more profitable business flights to North America, Europe and China, the daily said without citing sources.

Asia's largest carrier, which lost more than one billion dollars in the April-June quarter, announced last month plans for 6,800 job cuts, a drastic reduction in routes and a tie-up with a foreign carrier.

But the new centre-left government said the measures were insufficient and was refraining from granting another injection of public funds.

Under a new turnaround plan to be unveiled later this month, JAL is seen to seek 9,000 job cuts and a debt waiver from creditors of 250 billion yen (2.8 billion dollars), as well as the departure of president Haruka Nishimatsu.

But Japan's Nikkei business daily reported Saturday that the finance ministry and the Development Bank of Japan, JAL's main creditor, contend the latest turnaround plan will be too difficult to implement.