Factbox: JAL restructuring plan under state-backed fund

TOKYO Tue Jan 19, 2010 5:05am EST

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TOKYO (Reuters) - Japan Airlines Corp has filed for bankruptcy and will be restructured with the help of a state-backed turnaround fund, the Enterprise Turnaround Initiative Corp of Japan (ETIC).

Following are the key figures and measures in the fund's revival plan. This includes information from the ETIC's statement and a document provided by the government.

FINANCIAL AND OPERATIONAL POSITION

The ETIC said JAL companies are carrying about 780 billion yen ($8.6 billion) of interest-bearing debt, excessive relative to its earnings capacity. It said the carrier is operating too many routes and aircraft, and that management has been unable to take decisive action, resulting in excessive fixed costs.

FINANCIAL AID

The ETIC said it and the state-owned Development Bank of Japan would provide JAL with 600 billion yen in debtor-in-possession financing to ensure it can maintain operations. Following its decision to acquire JAL debt, it would inject 300 billion yen of capital into JAL.

The ETIC said JAL companies are expected to receive 730 billion yen worth of debt forgiveness.

JOB, ROUTE CUTS

JAL will cut its group workforce to 36,201 by fiscal year 2012 from 51,862 in fiscal year 2009.

The carrier will reduce the number of domestic routes to 119 from 136 and the number of international routes to 79 from 93.

FLEET STRATEGY

JAL will retire aging and less fuel-efficient aircraft and introduce smaller and more advanced planes.

It said it would retire all 37 of its Boeing 747-400 planes and all 16 of its McDonnell Douglas MD-90 aircraft. At the same time JAL will introduce 50 small and regional jets.

SHAREHOLDERS

The ETIC said it intends to implement measures to hold shareholders accountable, including a 100 percent reduction of capital. It said the final decision on that matter, however, would be made in a forthcoming revival plan.

The Tokyo Stock Exchange said it would delist JAL's shares on February 20.

PROFIT, SALES TARGETS

JAL's sales are expected to come to 1.36 trillion yen in the year to March 2013, a drop of 30 percent against the 1.95 trillion yen booked in the year ended March 2009.

Its operating profit is expected to recover to 115.7 billion yen in the year to March 2013 from an expected loss of 265 billion yen in the current business year to March 2010.

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