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JAL slides to record low on bankruptcy fears

JAL slides to record low on bankruptcy fears
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First Published: Tue, Nov 24 2009. 11 00 AM IST
Updated: Tue, Nov 24 2009. 11 00 AM IST
Tokyo: Shares of Japan Airlines Corp fell as much as 9.5% to a record low on investor worries the struggling airline could face bankruptcy if it cannot secure an agreement from its pensioners for benefit cuts.
JAL, Asia’s largest airline by revenue, asked retirees and employees on Monday to accept an average 40% cut to their pension payouts and warned a failure to agree on cuts could push it to a court-led restructuring.
The stock price slide also follows news that Mitsui & Co had sold its entire stake of 11.73 million shares in JAL during the six months to 30 September. A spokesman for the trading house did not say why it unloaded its shares, less than half of one% of the company.
JAL shares were down 7.4% at 88 yen after falling as low as 86 yen, their lowest since a relisting in 2002.
The stock has lost more than half its value this year and is down 14% since the close on 17 November after Transport Minister Seiji Maehara rattled investors by saying bankruptcy was still a possibility.
“Maehara has said that bankruptcy is not entirely ruled out, and many retirees appear to disagree with the pension cuts,” said Takashi Ushio, head of investment strategy division, Marusan Securities.
No one at JAL was immediately available for comment.
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First Published: Tue, Nov 24 2009. 11 00 AM IST