Japan Airlines Corp (JALSY) Jumps 4% After Announcement Of Pension Payout Cuts
December 16, 2009 9:05 AM
Japan Airlines Corp. (OTC: JALSY)(FREE stock trend analysis) jumped 4% after announcing that about 5,700 retirees have agreed to accept the proposed average cuts of 40% to pension payouts, falling just short of the required numbers.
As a prerequisite to receiving government bailout, Japan Airlines needs two-thirds of 8,800 retirees and two-thirds of 17,000 employees to agree to pension reductions. The company may gain the two-thirds majority if some of the 1,200 retirees who did not respond end up agreeing to the cuts.
The airline is also likely to get funds from foreign carriers eager to gain access to its network to fast-growing Asian markets. American Airlines and other members of the Oneworld alliance along with the private equity fund Texas Pacific Group are willing to invest $1.1 billion in JAL to keep it from defecting to Delta Air Lines (NYSE: DAL)(FREE stock trend analysis) and the rival Skyteam group. Delta and other SkyTeam members are ready to offer Japan Airlines a total financial aid package of about $1 billion, including a $500 million equity investment.
