JAL announced restructuring details, including list of route suspensions
Jul 19, 2010, 5:42 am
#106
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JL is selling all the 744 as well as the A300 and MD-90 which are outdated and not fuel efficient. Doubt that they will get much, if anything, out of the MDs and A300s. A lot of arilines are trying to sell their 744, so they wont fetch a high price either. The cash from selling those planes and catering is so small compared to losses induced by pay and pension. But I guess (hope) that they will try to tackle those much more important tiems too.
Funny to note another Japanese accounting gimmick. IF the Japan Times article is correct, those planes have a value on JL balance sheet that is vastly overstated. Apparently, they are overvalued 5 times (20% market value). So if they sell them for 80 billion, it means that the balance sheet value is 400 billion and they would incur a loss of 320 billion. So in typical Japanese fashion, they will first do some accounting trick on the balance sheet before selling them. Sad to see that the current value of JAL is such a huge negative number.
Funny to note another Japanese accounting gimmick. IF the Japan Times article is correct, those planes have a value on JL balance sheet that is vastly overstated. Apparently, they are overvalued 5 times (20% market value). So if they sell them for 80 billion, it means that the balance sheet value is 400 billion and they would incur a loss of 320 billion. So in typical Japanese fashion, they will first do some accounting trick on the balance sheet before selling them. Sad to see that the current value of JAL is such a huge negative number.
Jul 19, 2010, 7:35 am
#107
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I think some of the JL 744 are sold already, and domestic 744 will bound for scrapyard straight. So I guess some of the International bird may convert to domestic bird if no one wants them (not too sure about the check requirements though)
DL should have no problem getting JAL MD-8X / MD-9X whenever they got put on market (according to a.net DL is getting every single MD avaliable to them)
when it comes to A300 I am bit doubt if they have value for P2F conversion (which Air HK, Fedex and UPS operates, good for their incremental growth), part-out for current plane are their way out are also doable? (A300F still kind of popular freighter in the sky)
DL should have no problem getting JAL MD-8X / MD-9X whenever they got put on market (according to a.net DL is getting every single MD avaliable to them)
when it comes to A300 I am bit doubt if they have value for P2F conversion (which Air HK, Fedex and UPS operates, good for their incremental growth), part-out for current plane are their way out are also doable? (A300F still kind of popular freighter in the sky)
Last edited by ChrisLi; Jul 19, 2010 at 7:44 am
Jul 20, 2010, 2:19 am
#108
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Not to forget the fact that JAL already incurred another 3-4 bln USD "extra-ordinary" operational losses, since the day they declared bankruptcy.
Well, who cares and who's counting anyway??
And JAL was supposed to be a public stock-listed company?? What a joke!!!
One wonders how JAL are handling the safety regulations... (AOC etc.)
Anyway, I can't say I am really surprised. It's been a public secret that JAL were applying the same lousy patchwork-standards to their accounting, as they were to repairing their airplanes. (e.g. JL123)
In fact this whole situation is beginning to look more and more like the collapse of Bear Stearns, Lehman Bros. or Citigroup. : JAL acting as a government backed off-balance bad bank, carrying the bad debt of some of Japan's major institutions.
If JAL were to go really down, there is a systemic risk that the whole Japanese financial system would collapse.
So in a way, with all this - hidden - debt on its books, JAL really is 'TOO BIG TO FAIL'.
In any case, expect JL to cease its l/h routes in October!!
If nothing bad happens before that time.
.
Last edited by maeharasmuse; Jul 20, 2010 at 8:17 am
Jul 20, 2010, 6:08 am
#109
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A good question: Is JL too big to fail? Another question is : "is JL disappearance politically acceptable?"
I do not think that JL closing would lead to a domino effect in Japanese banks. As far as I know, Japanese financial insitutions have already marked down their debt to near zero because of the first official bankruptcy; they legally have to do it. So their remaining liability is small and they are not legally responsible or liable for any of current and future JL losses. The government is basically behind the existing $10+ billion loss, with no hope of ever recovering it. But JL bleeds cash by billions of yen every day. Obviously, no government wishes to be responsible for the closure of JL, especially in Japanese culture. But a drastic step, including plenty of face saving, has to be taken within weeks.
I do not think that JL closing would lead to a domino effect in Japanese banks. As far as I know, Japanese financial insitutions have already marked down their debt to near zero because of the first official bankruptcy; they legally have to do it. So their remaining liability is small and they are not legally responsible or liable for any of current and future JL losses. The government is basically behind the existing $10+ billion loss, with no hope of ever recovering it. But JL bleeds cash by billions of yen every day. Obviously, no government wishes to be responsible for the closure of JL, especially in Japanese culture. But a drastic step, including plenty of face saving, has to be taken within weeks.
Jul 20, 2010, 12:36 pm
#110
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Jul 20, 2010, 3:46 pm
#111
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So that's on top of the other 11 bln USD 'hidden losses' that were discovered only a couple of weeks ago??
Not to forget the fact that JAL already incurred another 3-4 bln USD "extra-ordinary" operational losses, since the day they declared bankruptcy.
Well, who cares and who's counting anyway??
And JAL was supposed to be a public stock-listed company?? What a joke!!!
One wonders how JAL are handling the safety regulations... (AOC etc.)
Anyway, I can't say I am really surprised. It's been a public secret that JAL were applying the same lousy patchwork-standards to their accounting, as they were to repairing their airplanes. (e.g. JL123)
In fact this whole situation is beginning to look more and more like the collapse of Bear Stearns, Lehman Bros. or Citigroup. : JAL acting as a government backed off-balance bad bank, carrying the bad debt of some of Japan's major institutions.
If JAL were to go really down, there is a systemic risk that the whole Japanese financial system would collapse.
So in a way, with all this - hidden - debt on its books, JAL really is 'TOO BIG TO FAIL'.
Not to forget the fact that JAL already incurred another 3-4 bln USD "extra-ordinary" operational losses, since the day they declared bankruptcy.
Well, who cares and who's counting anyway??
And JAL was supposed to be a public stock-listed company?? What a joke!!!
One wonders how JAL are handling the safety regulations... (AOC etc.)
Anyway, I can't say I am really surprised. It's been a public secret that JAL were applying the same lousy patchwork-standards to their accounting, as they were to repairing their airplanes. (e.g. JL123)
In fact this whole situation is beginning to look more and more like the collapse of Bear Stearns, Lehman Bros. or Citigroup. : JAL acting as a government backed off-balance bad bank, carrying the bad debt of some of Japan's major institutions.
If JAL were to go really down, there is a systemic risk that the whole Japanese financial system would collapse.
So in a way, with all this - hidden - debt on its books, JAL really is 'TOO BIG TO FAIL'.
1. What exactly is an extra ordinary Operating loss????
Thoughts
Their accounting practices are starting to remind me of WorldCom/Enron back in the last decade, if I was a JAL creditor personally I'd be very worried about the possibility of not getting paid back. JAL Management has GOT TO start aggressively cutting costs preferably by cutting pensions and Salaries by at least 25-30%. They can't continue to do this and the government can't continue to bail them out. Makes you wonder what else is going on in the Japan Financial system....
Jul 21, 2010, 7:15 am
#112
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Couple of questions/thoughts
1. What exactly is an extra ordinary Operating loss????
Thoughts
Their accounting practices are starting to remind me of WorldCom/Enron back in the last decade, if I was a JAL creditor personally I'd be very worried about the possibility of not getting paid back. JAL Management has GOT TO start aggressively cutting costs preferably by cutting pensions and Salaries by at least 25-30%. They can't continue to do this and the government can't continue to bail them out. Makes you wonder what else is going on in the Japan Financial system....
1. What exactly is an extra ordinary Operating loss????
Thoughts
Their accounting practices are starting to remind me of WorldCom/Enron back in the last decade, if I was a JAL creditor personally I'd be very worried about the possibility of not getting paid back. JAL Management has GOT TO start aggressively cutting costs preferably by cutting pensions and Salaries by at least 25-30%. They can't continue to do this and the government can't continue to bail them out. Makes you wonder what else is going on in the Japan Financial system....
Jul 27, 2010, 1:40 pm
#113
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http://www.reuters.com/article/idUSSGE66Q0L920100727
Another Day Another Request for a debt waiver
All I can say is I think it is time to bury JAL into the grave and start a new airline.
Another Day Another Request for a debt waiver
(Reuters) - Debt-ridden Japan Airlines Corp (JALFQ.PK) and the state-backed turnaround body overseeing its restructuring have sought lender approval to waive off more than 521.6 billion yen ($6 billion) that JAL owes, the Nikkei business daily reported.
Of the 521.6 billion yen for which approval is being sought, the company has 383 billion yen in loans and the rest in corporate bond and derivatives, the paper said.
Of the 521.6 billion yen for which approval is being sought, the company has 383 billion yen in loans and the rest in corporate bond and derivatives, the paper said.
Jul 28, 2010, 2:41 am
#114
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- JAL has an operating profit in June quarter (http://www.sankeibiz.jp/business/new...1518015-n1.htm)
- JAL will resume TV CM (http://www.jiji.com/jc/c?g=ind_30&k=2010072800413)
- JAL will shuffle management this year (http://e.nikkei.com/e/fr/tnks/Nni20100728D28SS047.htm)
- JAL submitted plan to reduce pilot pay (confirming previous rumor/report) (http://e.nikkei.com/e/fr/tnks/Nni20100728D28SS051.htm)
- JAL will resume TV CM (http://www.jiji.com/jc/c?g=ind_30&k=2010072800413)
- JAL will shuffle management this year (http://e.nikkei.com/e/fr/tnks/Nni20100728D28SS047.htm)
- JAL submitted plan to reduce pilot pay (confirming previous rumor/report) (http://e.nikkei.com/e/fr/tnks/Nni20100728D28SS051.htm)
Last edited by JALPak; Jul 28, 2010 at 3:06 am
Jul 28, 2010, 3:16 pm
#116
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http://e.nikkei.com/e/fr/tnks/Nni20100728D28JFN07.htm
JAL and ETIC will submit the restructuring plan to the Tokyo District Court as scheduled by the end of August but will likely to continue talks with banks in September including negotiation for financing
JAL and ETIC will submit the restructuring plan to the Tokyo District Court as scheduled by the end of August but will likely to continue talks with banks in September including negotiation for financing
Jul 31, 2010, 3:13 am
#118
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Here you go: http://www.yomiuri.co.jp/dy/business/T100723005797.htm
Last week Yomiuri reported some cost saving changes including landing procedure (I hope the change is safe...) and changes at the maintenance facilities
Last week Yomiuri reported some cost saving changes including landing procedure (I hope the change is safe...) and changes at the maintenance facilities
Jul 31, 2010, 12:44 pm
#119
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Here you go: http://www.yomiuri.co.jp/dy/business/T100723005797.htm
Last week Yomiuri reported some cost saving changes including landing procedure (I hope the change is safe...) and changes at the maintenance facilities
Last week Yomiuri reported some cost saving changes including landing procedure (I hope the change is safe...) and changes at the maintenance facilities
Aug 1, 2010, 11:54 pm
#120
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I may have missed this, but why specifically October?
As a corporate being, JAL seems akin to a horse with a broken leg. It may be better to shoot it and take all the equipment and start over again, without all the baggage. Although that doesn't seem acceptable from a Japanese perspective.
I have an award ending in NRT-SIN next month, hope it holds it all together until then.
As a corporate being, JAL seems akin to a horse with a broken leg. It may be better to shoot it and take all the equipment and start over again, without all the baggage. Although that doesn't seem acceptable from a Japanese perspective.
I have an award ending in NRT-SIN next month, hope it holds it all together until then.