Japan Airlines goes bankrupt
In the country's largest-ever corporate failure outside the financial sector, Japan Airlines, Asia's biggest carrier, has gone bust.
Asia's biggest airline has gone bust. In the country's largest-ever corporate failure outside the financial sector, Japan Airlines (JAL) has just filed for bankruptcy to get protection from its estimated liabilities of 2.32trn (£15.6bn). Its state-ordered restructuring, a similar process to Chapter 11 in the US, will see shareholders wiped out, the sacking of a third of its workforce and lenders being asked to waive around $8bn of debt.
What the commentators said
This is no surprise, said Lex in the FT. It has been "on a steady descent" for years. The credit crunch "just changed the angle": the average quarterly loss has more than doubled since it hit. High costs were a major problem. At one stage, it leased limousines to bring pilots to work. It seems "surreal", however, that governments everywhere have been propping up airlines, but only Japan "has pushed its flag carrier into bankruptcy".
JAL's "humbling" highlights how some of Japan's biggest corporate names "have failed to keep up with rapid shifts in the world economy", said Hiroko Tabuchi in the International Herald Tribune. But in dealing with the problem, "a new government in Tokyo has promised to make a break with the past". Yet "the biggest question remains unanswered", said John Foley on Breakingviews. "Does Japan really need two global airlines (JAL and ANA)?" International competition is ferocious. Cutting costs and debt "are all for the good, but there may be a case for restructuring JAL out of existence altogether".
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
-
Reeves warned against property tax shake-up – 3 ways it could backfire on first-time buyers
Rachel Reeves reportedly has her eye on high-end property taxes in the upcoming Budget, but there are concerns a shake-up could unintentionally hamper those trying to get on the housing ladder
-
Average Brits want to retire five years before they can – who has the widest retirement gap?
Brits are expecting to work for longer than ever but there are big disparities in the number of extra working years predicted. A small tweak could help close the gap