Is Japan Airlines on the verge of bankruptcy?
Shares in Japan Airlines fell by 45% today as speculation intensifies regarding a potential bankruptcy petition from the company. This comes despite the fact that American Airlines has increased its offer of investment from $1 billion to $1.3 billion and other potential investors are waiting on the sidelines. It was also announced that company's employees have agreed to a reduction in pension payouts with the company's pension scheme around £2.2 billion in deficit. So why have the shares collapsed?
The Japanese authorities have yet to announce whether they will refinance Japan Airlines or whether the company will be able to bring in outside investment such as that offered by American Airlines. This is causing confusion in the stock market and many investors are now running scared amid concerns about the short-term future of the group. Each day that this predicament continues will weaken the company's finances and the company's trading position.
This is just the latest in a long line of negative news stories regarding the worldwide airline industry which has been hit by rising fuel prices, increased taxes and a reduction in premium travel numbers. There are some who believe the industry needs to experience significant pain in order to rebase for the future.
Share this..
Related stories
British Airways wins court injunction
It has been revealed that British Airways has been successful in its High Court injunction against strike activity announced by the Unite union. The company is believed to have used a small technicality to obtain an injunction and the first of many planned strikes, due to begin at midnight tonight, will not go ahead. So is this the end of the conflict between the union and the British Airways mana...
Read MoreIs protectionism really as bad as people suggest?
As the worldwide economy continues to head downwards we are seeing more and more signs of protectionism around the world as governments look inwards to protect trade and employment. Gordon Brown has been a particular critic of protectionism even though he has come under significant pressure at home to ensure "British jobs for British workers". So what really is protectionism and is it really as ba...
Read MoreTakeover panel reviews Cadbury comments
As we mentioned yesterday, the chief executive of Cadbury, Todd Stitzer, has become embroiled in something of a slanging match with Merrill Lynch over reported comments made at a recent conference. Merrill Lynch seemed to suggest in a recent research note that the chief executive had indicated that a takeout price of 15 times profit, before tax and depreciation, would be a fair offer for the compa...
Read MoreAre we seeing demand improving for used cars?
Car dealership Lookers has today given the car sales industry something of a pickup with news that greater demand for used cars has been experienced over the last few weeks. This, when set-aside the turmoil in the car manufacturing sector, would appear to give secondhand car sales businesses some hope that demand may well be slowly filtering back into the sector.
However, it is also...
Is Japan Airlines just hours away from bankruptcy?
Shares in Japan Airlines have fallen further today as the reality of the company's financial situation continues to hit home with investors. Having fallen to a record low equivalent to 26p a share it is believed the company is just hours away from an official bankruptcy ruling which will transfer ownership of the company to a state owned turnaround venture. But is this the end of Japan Airlines?...
Read More