Japan AirLines (JAL) File for Bankruptcy
After weeks of speculation, Japan Airlines has finally filed for bankruptcy in one of Japan's largest-ever corporate failures.
The once-mighty flagship carrier and Asia’s biggest airline will face sweeping reforms - staff retrenchment, change in management, reducing welfare benefits, and other cost cutting measures.
Shareholders will be wiped out while creditor banks are forced to write off as much as ¥350 billion in debt. Taxpayers will also bear part of the burden, to the tune of ¥600 billion.
JAL bankruptcy shows that nothing is too big to fail in the airline industry. Hopefully, our proud national icon, Singapore Airlines, will never have to face such a fate.
SIA subsidiary, Tiger Airways, is a different story though. It recently concluded a successful IPO to raise cash for expansion but fundamentally, its customer service is disgraceful. Low cost doesn't mean you can have a take-it-or-leave-it attitude.
If Tiger Airways continues to lose money, could it be another JAL in the making?
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