Japan Airlines in Bankruptcy

Flag carrier of the Empire of the Rising Sun sinking under crushing debt load

We're accustomed to news of failed/failing/bankrupt airlines in America and even in Europe, but Asian airlines either have held up better through economic turmoil or Asian nations, unwilling to lose face, have propped up their national carriers. Japan Airlines is now in deep financial doo-doo. Its debt load, reportedly $25.6 billion, proved too much to sustain. The airline has filed for one bankruptcy protection and is facing restructuring including cutting some 16,000 jobs, cutting routes, shifting to more efficient aircraft and reducing retirees' pensions, quite a shock in the context of the nurturing Japanese social and business environment. Government support will keep JAL planes flying during this cataclysmic makeover.

Expect JAL to retire all 37 of its Boeing 747s and 16 MD-90s and replace them with 50 smaller regional jets. This will impact the long-haul routes, cutting some of the 220 airports (59 of them domestic) in 35 countries. Delta, which recently absorbed Northwest Airliner (that originally was called Northwest Orient Airlines with service to the Far East) is courting JAL to the tune of $1 billion (including $500 million in cash) to seduce JAL from American Airlines and the OneWorld frequent flyer alliance. American Airlines and its partners promise $1.4 billion cash to the Japanese airline to stay with OneWorld. The next time I fly Delta or American and am socked with a $25 fee to check a piece of luggage, I'll think about where those dollars are going. American, BTW, just reported a $347 million fourth-quarter loss, so I'm not sure whether their planning to print $1.4 billion or whether they're going to charge even more for passengers' checked baggage.