JAL has attributed its current financial woes to a sharp drop in business passengers on international flights, triggered by the global financial crisis.

Capital injection

The ETIC estimated the liabilities of JAL exceed its assets by more than $9.5bn (860bn yen), Kyodo quoted an unnamed sources as saying.

It plans to reduce the troubled airline's liabilities by 730bn yen through the court-backed bankruptcy, the report said.

It will also invest 300bn yen in JAL and after the bankruptcy proceedings, the turnaround body will guarantee more than 470bn yen for payments of fuel and
other commercial transactions necessary to keep JAL flying.

The rehabilitation plan was also said to call for sale of the airline's subsidiaries including JAL Hotels Co.

The ETIC will decline cash offers from Delta and American Airlines as it fears giving
foreign carriers a foreign stake in the company would complicate the restructuring, according to media reports.

Instead, the airline will pursue only greater co-operation with either Delta or American, the business daily Nikkei said on Sunday.

Delta and its SkyTeam partners have offered $1bn to JAL, while American has countered with a $1.4bn.