Japan Airlines may post $13.3 billion net loss: Nikkei

Japan Airlines (JAL) is likely to post a net loss of $13.3 billion this financial year due to a huge restructuring charge, the Nikkei business daily said, dragging down shares of the ailing carrier by 8%.

The airline, weighed down by $16 billion of debt and mired in losses, applied in October to the Enterprise Turnaround Initiative Corp of Japan (ETIC), a body of specialists that can draw on state-guaranteed funds to aid ailing firms.

The ETIC is considering injecting about $3.3 billion of fresh capital into JAL if the carrier files for bankruptcy and its banks agree to write off loans, a source familiar with the matter said.

JAL shares have lost more than two-thirds of their value in the past 12 month as investors fret about the fate of the carrier and mull the impact of a possible bankruptcy.

"The Nikkei's report of a one trillion yen net loss is more than I expected," said Mizuho Investors Securities senior analyst Takahiko Kishi.

"JAL's stock price has begun factoring in the possibility of bankruptcy. But I think (the stock price) is still high ... that's probably because there remain some expectations for out-of-court restructuring," he said.

Shares of JAL tumbled 8.3% to 77 yen by the midday break, becoming the second-biggest percentage loser on the Tokyo Stock Exchange's first section. The benchmark Nikkei average was up 0.1%.

JAL said in a statement the reported earnings figures were not something it had announced.

The ETIC has asked JAL's creditors to forgive about 350 billion yen in debt, three sources with knowledge of the negotiations have said.

The Nikkei said the turnaround body's plan calls for the carrier to slash more than 10,000 jobs over three years and write down the value of its fleet, resulting in a special charge of 1.13 trillion yen for JAL in the year ending this March.

The airline's operating loss could also widen to 260 billion yen as customers defect to other carriers, the paper said.

JAL's net loss will likely reach 1.23 trillion yen ($13.3 billion) for the year ending in March, the paper said.

JAL has not given a forecast for this financial year due to uncertainties over its business outlook.

The carrier, Asia's biggest by revenue, posted its fourth straight quarterly net loss in July-September.

Due to the massive charge, the ETIC expects the carrier's liabilities to exceed its assets by 840 billion yen, the Nikkei said.

The ETIC will likely announce its intention to support JAL around January 20 if it succeeds in winning creditor banks' approval for its turnaround plan, the paper also said.