No bonus as carrier may go broke this month; bridge loans urged

Japan Airlines Corp. said Friday it will not pay winter bonuses, and the government asked the carrier's main creditor banks to provide bridge loans to keep the struggling airline afloat, sources said.

President Haruka Nishimatsu notified JAL's unions of the plan to skip winter bonus payments, the first move of its kind since Japan's top airline was fully privatized in 1987.

JAL's main banks — including state-backed Development Bank of Japan — gave no immediate response to the request by the government team aiding the airline's reconstruction because they are seeking state guarantees attached to the bridge loans, the sources said.

JAL may run out of cash by the end of this month. But a viable measure to reduce its high corporate pension benefits is likely to be a prerequisite for the government to attach guarantees to prevent the use of taxpayer money to fund the high-cost system.

The carrier recently sought support from a government-backed corporate turnaround body, Enterprise Turnaround Initiative Corp. of Japan, but the airline urgently needs about ¥180 billion in short-term financing to support operations until the entity formally decides on a rescue package, the sources said.

Nishimatsu apparently decided to enter negotiations with the unions because it would be difficult to offer winter bonuses at a time when JAL is soliciting huge financial aid from ETIC.

Earlier in the day, Seiji Maehara, minister of land, infrastructure, transport and tourism, called on JAL retirees to realize the company's dire situation after they reiterated their opposition to having their pensions reduced.

JAL, which has received three bailouts in less than a decade, hopes to gain access to ample private and public funds by applying to ETIC.