More problems in the airline industry
Shares in Japan Airlines fell 11% overnight amid concerns that the company is on the verge of filing for bankruptcy with a £10 billion debt pile. Despite the fact that the company has offers from American Airlines and Delta to take a stake in the company, the Japanese finance minister has confirmed that no more state funding will be made available for the airline. This is just the latest in a lengthening chapter of negative news for the sector which is reeling from reduced passenger numbers, growing debt and the security issue at the weekend which saw an attempted terrorist attack on a US bound plane.
British Airways has many years been the U.K.'s leading airline but like Japan Airlines the company has seen passenger numbers reduced, margins slashed and indeed industrial action appears almost certain in the New Year. The company itself is currently pushing through a merger with Iberia but if the company's finances continue to deteriorate there is a chance the move could be in jeopardy. Whether the UK government is able or willing to step in and assist British Airways in the short term is open to debate but the airline industry is certainly in trouble with little investor appetite to bail it out.
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