Several cabinet members of the Japanese government want Japan Airlines Corp to withdraw completely from its international flights business and consolidate it with that of All Nippon Airways Co, the Mainichi Shimbun newspaper reported on Thursday.
The cabinet members met on Wednesday and appeared to have floated the idea in order to improve JAL's financial condition, Mainichi reported, without citing any sources.
But Transport Minister Seiji Maehara was opposed to the plan of having only one international flight service airline from Japan, the newspaper said.
Mainichi said the discussions of the cabinet members were based on the assumption that JAL will be restructured under a court-led process.
The idea was raised as JAL's international flights business has been a huge burden for its overall operation, with a government-backed turnaround fund requiring JAL to revitalize within three years.
JAL has announced it will terminate flights on 30 routes, including 13 international, by June.
On Wednesday, JAL shares tumbled as much as 32 percent to a record low on growing expectations the struggling carrier was headed for bankruptcy under a state restructuring plan.
Tokyo financial markets are closed for a public holiday on Thursday.
The chances of bankruptcy appeared to increase last week when Finance Minister Hirohisa Fujii said the government would not back any more loans to JAL. Private banks are unlikely to extend loans without guarantees against future losses.