SINGAPORE, NOV 13 - Japan Airlines said Friday it racked up a $1.5 billion loss and was seeking government help to fend off creditors as the beleaguered carrier struggles to recover from the travel industry's deepest slump in years.
The fate of Asia's largest airline was so uncertain that it abandoned any forecasts for the year — a sign of the hardships it faces as it presses for a government bailout and mulls painful cost-cutting steps that could slash thousands of jobs.
Japan Airlines Corp., long seen as the country's flagship carrier, booked a 32.1 billion yen ($356.7 million) loss for the second quarter through September, bringing its red ink for the fiscal first half to 131.2 billion yen ($1.5 billion).
The first-half loss was its biggest ever for the period and a reversal from last year's profit. Quarterly sales dipped 26 percent to 429.0 billion yen ($4.8 billion).
Speculation had been high the company's management would be ousted over the poor performance. But JAL President Haruka Nishimatsu said he and other executives will stay on at least through the turnaround.
"We feel very great responsibility," he told local media. Japan Airlines, battered by a collapse in travel brought on by the global slowdown and a swine flu outbreak, said it was approved for a government-orchestreated "turnaround procedure," which could help it delay its massive debts to creditors. As of this month, the company's interest-bearing debt stood at some $9.5 billion.
In working to restore its balance sheet, the company has been embroiled in talks with retired workers to slash pension benefits that critics say need to be a key part of the restructuring plan.
The company has been teetering for years, hammered by surging fuel prices, global competition and an image problem caused by a series of safety lapses. It had been gradually losing even Japanese customers to its local rival All Nippon Airways.
JAL also failed to be as nimble as some competitors in reducing unprofitable routes because it sought to preserve its status as a flagship carrier. In recent years, its has tried to lower costs by cutting thousands of jobs, largely by attrition, introducing more fuel-efficient aircraft, focusing on premium business travelers, ending unprofitable routes and reducing the frequency of flights.
For the first half, international passengers flying JAL slid 10 percent on year to 5.47 million people, while fliers in Japan also fell 10 percent to 19.15 million. Business travel declined because of the global slump, while a strong yen discouraged tourist traffic to Japan, the company said.
