TOKYO - Japan Airlines Corp said on Tuesday 5,700 retirees were willing to accept proposed cuts to pension payouts, falling just short of the numbers the struggling airline needs to secure approval for reducing its pension burden.
JAL needs two thirds of 8,800 retirees and two thirds of 17,000 employees to agree to pension reductions -- a prerequisite for the debt-laden airline to receive a government bailout.
The carrier has warned it could face bankruptcy unless it addresses a pension shortfall of about 330 billion yen ($3.7 billion).
It may gain the two thirds majority it needs if some of the 1,200 retirees who did not respond to its non-binding company survey end up agreeing to the cuts.
JAL also said that 90 percent of its employees had responded that they understood the need for pension cuts.
The airline will ask retirees and employees to give their formal consent to an average 40 percent cut to their pension payouts by the end of January.
Coming up with a solution to the shortfall is seen as necessary so that it can qualify for the support of a state-backed turnaround fund, which is now debating whether to bail out the airline with public funds.
If JAL and its employees and retirees cannot come to an agreement, the government has said it would consider crafting legislation to forcibly implement cuts.
In addition to a potential state bailout, the struggling airline is likely to get funds from foreign carriers eager to gain access to JAL's network to fast-growing Asian markets.
American Airlines has said it and other members of the Oneworld airline alliance along with private equity fund TPG are willing to invest $1.1 billion in JAL to prevent it defecting to Delta Air Lines and the rival Skyteam group.
Delta has said that it and other SkyTeam members are ready to offer JAL a total financial aid package of about $1 billion, including a $500 million equity investment. (Reporting by Nobuhiro Kubo and Chikafumi Hodo; Editing by Edwina Gibbs)