Japan Airlines mulls $2.88bn in subordinated loans

JAL – Japan Airlines (JL, Tokyo Haneda) is investigating the possibility of raising around JPY300 billion yen (USD2.88 billion) in subordinated loans – which rank after other debts if a company falls into liquidation – and is about to launch talks on the issue with a group of banks, sources told Kyodo News on October 26. The revelation came after the same news agency reported on October 14 citing unnamed sources that ANA Holdings, the parent company of JAL’s longtime rival ANA – All Nippon Airways (NH, Tokyo Haneda), had managed to secure JPY400 billion (USD3.8 billion) in subordinated loans from five banks. JAL projects a net loss of JPY200-250 billion (USD1.9-2.4 billion) for the current financial year to March 2021, sources told both the Nikkei and Kyodo News on October 28, which would make it unprofitable for the first time since it relisted on the Tokyo Stock Exchange in 2012. For the last fiscal year, it posted a profit of JPY53.41 billion (USD510 million). The airline has not yet provided guidance for the year due to the prevailing uncertainty, but it is due to release results on October 30 for the second quarter and first half of the year to the end of September. It is expected to report a second-quarter loss of about JPY85 billion (USD815 million) from its core business, the Nikkei reported. As previously reported, ANA Holdings expects a JPY500 billion (USD4.77 billion) net loss for the year to March.