According to the Kyodo news agency, JAL's board is expected to convene a special meeting on Tuesday afternoon before filing for protection from creditors under the Corporate Rehabilitation Law - Japan's version of Chapter 11 bankruptcy practised in the US.

Stock plunge

Worries over JAL's future have seen its stock price plunge in recent days, losing more than 90 per cent of its value.

JAL's woes


Japan Airlines was founded in 1951, expanding quickly with Japan's post-war economic recovery and was privatised in 1987.

 But it soon became the victim of its own ambitions, and when Japan's property and stock bubble of the 1980s burst it exposed the airline's risky investments in foreign resorts and hotels.

 In 1985 the crash of JAL 747 on a domestic flight to Osaka killing 520 people raised questions over the airline's safety.

 More recently JAL has been hit by growing pension and payroll costs, and saddled with a sprawling network of unprofitable domestic routes that it has been politically obligated to maintain.

 Adding to its troubles, passenger traffic has slowed amid the global economic downturn, swine flu fears, and competition from rival carriers.

By early Tuesday shares in the airline were trading at a record low of just $0.04 as investors jumped ship ahead of the expected bankruptcy.

That left JAL's market value at just $120m, well below the price of just one new Boeing 787 jet.

Following the bankruptcy proceedings, the restructuring of the airline will be led by a new chief executive – Kazuo Inamori, one of Japan's richest entrepreneurs.

Inamori founded the Kyocera electronics group, as well as Japan's number two mobile phone network, KDDI.

However, he has no experience in the airline industry.

The restructuring plan calls for about 15,600 job cuts, or a third of JAL's workforce, and will require the airline to halve the number of its subsidiaries which span everything from hotels to credit cards.

In turn the government-backed Enterprise Turnaround Initiative Corp will invest about $3.3bn in the carrier, while JAL's main lenders have been asked to write off about $3.8bn in liabilities.

Despite JAL's financial woes, however, the airline remains a prized asset for foreign airlines because of its extensive access to Asian routes.

Recently the Skyteam airline alliance led by Delta airlines has been involved in a fierce tug-of-war trying to woo JAL away from its current membership in the One World group, led by American Airlines and British Airways.

Delta and its Skyteam partners have offered $1bn, including $500m in cash, to lure JAL away from One World.

At the same time American and its partners say they are ready to inject $1.4bn in cash into the Japanese airline, up from a previous $1.1bn offer.