UPDATE 1-JAL bankruptcy plan to slash services, jobs-Nikkei

Jan 9 (Reuters) - A prepackaged bankruptcy of Japan Airlines Corp 9205.T will involve drastically cutting the carrier's services and providing the airline with 600 billion yen in credit as a bridge loan, the Nikkei business daily said.

The government may approve the turnaround plan for Asia's biggest airline by revenue as early as Tuesday, with the carrier filing for court protection around Jan 19, the daily said.

The airline's top lenders had been pushing for a creditor-led workout but are now expected to accept the government's decision, according to the paper.

Under the plan, the Enterprise Turnaround Initiative Corp of Japan (ETIC) is expected to serve as the company's court appointed administrator and plans to offer the 600 billion yen bridge loan together with Development Bank of Japan, the Nikkei said.

The Nikkei said that during the three year timeframe set for rebuilding the carrier it is expected to cut 13,000 jobs, write down the value of the airline and cancel an additional 26 domestic and overseas routes.

The carrier had already announced the cancellation of 21 routes.

The ETIC is seeking a delisting of JAL through a 100 percent reduction of capital, which would wipe out existing shareholders.

However, Japan Airlines management and creditors are lobbying to keep the company listed, the business daily said. (Reporting by Archana Shankar in Bangalore)