The two core units of Japan Airlines Corp in charge of operating flights and procuring funds will file for bankruptcy protection along their parent, the Nikkei newspaper reported on Friday.
Japan Airlines Corp, Asia's largest airline by revenues, will file for bankruptcy protection as early as Tuesday as part of a restructuring package being crafted by a state-backed turnaround fund, sources have told Reuters.
Japan Airlines International, which handles domestic and overseas flights and JAL Capital, which raises operational funds, will also file for bankruptcy and be part of the state-led bailout, the Nikkei said.
With $16 billion in debt, JAL's bankruptcy would be the sixth largest in Japan's history.
The Enterprise Turnaround Initiative Corp of Japan (ETIC), the state-backed fund, plans to put about 300 billion yen in fresh capital into JAL after the bankruptcy, sources have said.
After the ETIC officially decides to support JAL, the parent and its two core units will merge their operations and streamline their administrative sections, the Nikkei said. (Reporting by Nathan Layne; Editing by Edwina Gibbs)