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Hatoyama instructs ministers to make further efforts on JAL rescue plan

TOKYO —

Prime Minister Yukio Hatoyama instructed cabinet ministers Sunday night to make further efforts to resolve the issue of how to rescue ailing Japan Airlines Corp., government officials said.
   
Speaking to reporters after meeting with Hatoyama and other ministers, transport minister Seiji Maehara indicated the government will aim to release a JAL rescue package by Friday, the same day the airline is scheduled to report its earnings results for the April-September first half of the current fiscal year.
   
‘‘With the release of JAL’s interim earnings results approaching, we will further discuss the rescue package with the premise that we will not create a situation in which airplanes do not fly,’’ Maehara said.
   
State minister for national policy Naoto Kan, Finance Minister Hirohisa Fujii and Administrative Reform Minister Yoshito Sengoku also participated in Sunday’s meeting, the officials said.
   
JAL has applied for support from a government-backed corporate turnaround body, the Enterprise Turnaround Initiative Corp of Japan, and the government is seeking to compile a comprehensive rescue package for Japan’s largest airline, which faces the risk of a cash shortage as early as the end of this month.
   
The planned package is expected to center on special legislation to enable a mandatory reduction in JAL’s high corporate pension benefits in exchange for the injection of public funds. It is also expected to include a reduction in landing fees and aviation fuel taxes.
   
The government coming up with a turnaround plan is seen as key to convincing JAL’s major creditor banks to provide the airline with bridge loans to keep it afloat until it can get financial help through the government-backed corporate turnaround body.
   
Meanwhile, JAL officials revealed Sunday that the airline has decided to skip monthly pay for all its executives, including President Haruka Nishimatsu, for December.
   
Given poor business results, the company has decided to skip executives’ monthly pay for the first time since its merger with Japan Air System in 2002. About 70 top executives will be subject to the plan.
 

© 2009 Kyodo News. All rights reserved. No reproduction or republication without written permission.

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