Japan Govt to Step Up Involvement in JAL Reconstruction

Tokyo, Oct. 25 (Jiji Press)--The Japanese government plans to step
up its involvement in the reconstruction of Japan Airlines <9205> to ensure
the struggling airline's turnaround, sources familiar with the matter said
Sunday.

The government plans to put state-backed Enterprise Turnaround
Initiative Corp. of Japan in charge of overhauling the airline, known as
JAL, the sources said.
Related cabinet ministers are expected to discuss the idea as early
as this week, the sources said.
A task force set up by transport minister Seiji Maehara plans to
draw up JAL's turnaround plan, including the use of public funds, as early
as this month.
But government officials now believe that a state-backed body needs
to lead the effort in order to have JAL implement restructuring steps
drastic enough for the company to accept public money, the sources said.
The turnaround body is expected to come up with a separate
reconstruction program as early as possible within this fiscal year ending
next March.
Restructuring steps that the turnaround body will work out may
include deep cuts in pension benefits to JAL employees and retirees, the
sources said.
The turnaround body will be in charge of holding talks with JAL's
creditor banks about a debt waiver while arranging for public fund
injections into the airline.