Credit line for Japan Airlines to be doubled to $2.2 bn

Credit line for Japan Airlines to be doubled to $2.2 bn

Tokyo: The Japanese government will double its credit line for Japan Airlines Corp. to $2.2 billion as a stopgap measure to keep the cash-strapped carrier afloat by the time its state-backed bailout is worked out later this month.

The expansion of $2.2 billion (¥200 billion) credit line was finalized by the state-owned Development Bank of Japan last week over speculation that the Japan Airlines was heading for bankruptcy proceedings.

In its negotiations with other airlines for receiving capital injection, JAL is also considering Delta Airlines Inc. as a potential partner rather than its current marketing alliance partner American Airlines Inc., sources familiar with the matter said.

Deputy Prime Minister Naoto Kan, transport minister Seiji Maehara and other ministers in charge of a bailout for the nation’s largest carrier came up with the sum during a meeting at the prime minister’s office on Sunday afternoon.

But the government said it will provide no guarantees for the envisaged DBJ bridge loans to support JAL until the state-backed Enterprise Turnaround Initiative Corp. of Japan decides on a financial package for the carrier by the end of this month.

The government also requested the turnaround body to decide on aid measures for JAL at an early date.