TOKYO — Shares of struggling Japan Airlines Corp. nosedived to a record low Wednesday on growing fears the money-losing carrier could be put through bankruptcy court as part of restructuring.
Asia’s biggest airline, known as JAL, closed down 24 per cent at 67 yen on the last trading day for 2009 on the Tokyo Stock Exchange. Earlier in the day, JAL plunged 32 per cent to 60 yen.
Wednesday’s finish marked a staggering fall from JAL’s closing price of 213 yen at the beginning of this year.
“Investors were very nervous about the fate of JAL. With recent reports saying the airline could face bankruptcy, investors were panicking their JAL stock ownership could be worthless,” said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd.
JAL is undergoing major restructuring to get itself back on solid footing.
Kyodo News agency said a government-backed corporate turnaround body, which is responsible for restructuring JAL, has proposed to the airline’s creditor banks that the struggling carrier be placed in court-backed bankruptcy proceedings.
But the Yomiuri daily, Japan’s top-selling newspaper, said Wednesday the banks rejected the liquidation proposal because of fears of widening losses and concern that bankruptcy could disrupt the airline’s operations.
Kyodo said the corporate turnaround body is expected to finalize its plan on reviving JAL by late January.
A spokesman for JAL could not be reached for comment.
Delta Air Lines Inc., the world’s biggest airline operator, and its rival American Airlines are vying for a stake in JAL in a bid to expand their Asian networks.
JAL and American Airlines are in the oneworld alliance. Delta and its SkyTeam partners have offered $1 billion to lure JAL from American.