A government task force set up to help revive Japan Airlines Corp said on Friday it would review the carrier's turnaround plans from scratch and that splitting it into good and bad parts was an option.
JAL, swamped by $15 billion of debt and headed for its second straight annual loss, pleaded on Thursday for a government bailout, but the new transport minister withheld his support on concerns the airline's cost-cutting plans would not go far enough. [ID:nT38558]
Shares of JAL continued to tumble, falling another 7 percent, as the former state-owned national flag carrier's fate remains highly uncertain.
Delta Airlines and a rival group of carriers led by American Airlines are holding separate talks to invest in and deepen ties with JAL, eyeing growth in Japan and the rest of Asia.
The idea of breaking JAL into good and bad parts, similar to the restructuring of U.S. automaker General Motors [GM.UL] has been floated by creditors, banking sources have told Reuters. [ID:nBNG497773]
But the task force also reiterated the transport minister's stance that bankruptcy was not being considered.
We are not thinking about using legal procedures. We can work things out among interested parties, the head of the task force Shinjiro Takagi told reporters.
Takagi, an advisor for Nomura Securities, also served as chairman of a state-backed corporate turnaround body, the Industrial Revitalisation Corp of Japan.
The task force was assembled to draw up restructuring plans for JAL by the end of November after the struggling carrier's own plans failed to satisfy government officials.
The government's Chief Cabinet Secretary Hirofumi Hirano said urgent action was needed but also added that the government was not necessarily assuming that there would be an injection of public funds.
The stock price is falling... We need to work on this urgently, Hirano told a news conference. JAL's shares dropped 7.6 percent to 133 yen, following a 16 percent dive on Thursday, and underperforming the benchmark Nikkei Average .N225 which lost 2.6 percent.
(Additional reporting by Yoko Kubota and Taiga Uranaka; Editing by Edwina Gibbs)