JAL maybe forced into bankruptcy

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Last-ditch bid to keep JAL flying Oneworld

Last-ditch bid to keep JAL flying | Herald Sun
Last-ditch bid to keep JAL flying

Geoff Easdown January 12, 2010 9:40PM

THE Oneworld airline alliance turned its biggest guns on an attempt by Delta Airways to poach key Pacific routes from cash-strapped Japan Airlines.

A delegation of Oneworld representatives - from American Airlines, British Airways, Qantas and Cathay Pacific - put up a significantly enhanced $US2 billion offer to stop JAL from being grounded.

American Airlines and its private equity partner Texas Pacific pledged an immediate injection of $US1.4 billion cash - $US300 million more than the pair had previously offered.

American Airlines executive vice-president and chief financial officer Tom Horton said the offer the US carrier had put on the table would deliver roughly $US2 billion in value to JAL over three years.

Qantas has offered to share its expertise in running a budget airline as part of the new deal. ...
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drron said:
Just as well I dont have shares in JAL-fell by their daily limit to just 7 Yen today.Then why would anyone buy?
JAL share price collapses, bankruptcy seen near | Reuters
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I don't really understand how this works completely but people buy as a gamble. Often on news like this the share price will drop below the underlying value. So they are betting that there is some value to be extracted. Of course, if I did this I'd end up lossing all my money :rolleyes:
 
medhead said:
Often on news like this the share price will drop below the underlying value. So they are betting that there is some value to be extracted.
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Indeed. If a rescue plans comes through that doesn't involve bankruptcy, then the shares should rally. If bankruptcy occurs, the shares will likely be worthless. No different to many other companies that have gone down that path in Australia... Easy money has been made by some, and others have lost a lot.
 
medhead said:
I don't really understand how this works completely but people buy as a gamble. Often on news like this the share price will drop below the underlying value. So they are betting that there is some value to be extracted. Of course, if I did this I'd end up lossing all my money :rolleyes:
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There are lots of penny shares out there and I would class JAL in the same bucket. If JAL does a chapter 11 type of escape then the inherent value of the shares will return and migth be worth a punt.

Chuck $500 on an "investment" like this and you maybe have a better chance of LONG term recovery of your investment than say the Melbourne Cup.
 
simongr said:
Chuck $500 on an "investment" like this and you maybe have a better chance of LONG term recovery of your investment than say the Melbourne Cup.
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There's a real thing about not allowing airlines to just go under like most companies would. Just look at Alitalia. In the case of JAL it's kind of like to Japan what Qantas is the Australia. Ok, the last government let Ansett fold, but would they have done the same if it had been Qantas going under? So for a lot of investors they're probably snapping it up at a very low price in the almost certain belief that JAL will go on in one form or another and they'll get themselves a tidy profit a few years into the future.
 
simongr said:
There are lots of penny shares out there and I would class JAL in the same bucket. If JAL does a chapter 11 type of escape then the inherent value of the shares will return and migth be worth a punt.

Chuck $500 on an "investment" like this and you maybe have a better chance of LONG term recovery of your investment than say the Melbourne Cup.
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There is also the gain on the bounce following bad news. There is usually a upswing following a dive on bad news because the market usually over reacts and then corrects. And of course, there is the chapter 11 type of situation, which we mostly don't see in Oz.
 
There is also a story in the australian today about this

Junked Japan Airlines not worth jumbo | The Australian

Interesting bit is that a 5 yen JAL is worth less than a "Jumbo" (:rolleyes: ok it is news limited) This situation has turned JAL into a "pure money game" which explains why people are buying.

It also says that Delta was offering to pay $300 million compensation for lost sales to move to skyteam but is now only offering to pay transistion costs.
 
JAL Bankrupt

"JAPAN Airlines (JAL) filed for bankruptcy protection today as part of a biting overhaul of the debt-ridden carrier, in one of the country's biggest ever corporate failures.
Asia's biggest carrier said its flight operations would not be interrupted by the bankruptcy filing with a Tokyo court, part of a radical restructuring announced after years of losses as the company sank deeper into debt.

Japan Airlines files for bankruptcy | News.com.au
 
JAL Bankrupt

I can't report the link (less than 10 posts) but it's official.
 
Re: JAL Bankrupt

Japan Airlines: Important company information

19 January 2010


To all our valued customers,

This is to confirm that Japan Airlines is now receiving
the support of the Enterprise Turnaround Initiative Corporation of Japan.
And to speed up the revitalization, JAL has filed for protection
at the Tokyo District Court under Japan's Corporate Reconstruction Law.
As a result of these actions, JAL has secured the funding needed to
maintain
uninterrupted business operations and to meet the debt service
obligations going forward. In addition, all JAL frequent flyer programs
remain fully in effect.

JAL Group airline companies will continue to provide safe, reliable
air travel services to customers worldwide. Existing JAL Group carrier
tickets and reservations,including those for codeshare flights and
connecting flights operated by other carriers,remain valid and in
effect, and new reservations are being accepted and processed normally.
Complimentary coupons issued to shareholders are valid until the
original expiry dates and can be used as before.

JAL Mileage Bank services remain unchanged, and customer mileage
credits remain fully valid.
Mileage can continue to be accumulated or redeemed for awards as in
the past,
and previously redeemed awards retain their full value.
JAL Mileage Bank services will also continue to be offered to all
JMB members and JALCARD holders.

JALCARD, JALPAK, JALTOURS, JAL HOTELS and other group companies
remain unaffected by recent events and are fully operational.

We would like to express our deepest apologies for the worry caused by
the financial situation of JAL and seek your continued patronage and
support of JAL and the JAL group companies.


Sincerely yours,

Japan Airlines
 
Re: JAL Bankrupt

Given the statement above, I assume that JAL has gone into a United Airlines Chapter 11-style bankruptcy, rather than a total-implosion-and-disappear-into-another-dimension-like-Ansett bankruptcy?
 
Re: JAL Bankrupt

NYCguy said:
Given the statement above, I assume that JAL has gone into a United Airlines Chapter 11-style bankruptcy, rather than a total-implosion-and-disappear-into-another-dimension-like-Ansett bankruptcy?
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Well unlike Ansett it doesn’t seem anyone has done a runner with the leftover cash :p

But more seriously, when is the SkyTeam/OneWorld announcement due?
 
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