After a two-month delay, struggling Japan Airlines was to announce on Tuesday details of a rehabilitation plan that will see thousands of job cuts as well as route closures and debt waivers.
In January the flagship carrier went under with US$26 billion of debt in one of Japan's biggest-ever corporate failures, but has continued flying while it goes through a painful state-led restructuring process.
Since filing for bankruptcy protection in January, JAL was delisted from Tokyo's stock exchange in February and is now going through a court-led restructuring with the help of a government-backed turnaround fund.
JAL was set to submit on Tuesday to a Tokyo court its rehabilitation plan, including a debt waiver worth 521.5 billion yen ($6.2 billion) and up to 16,000 job cuts, reports said.
JAL chairman Kazuo Inamori and president Masaru Onishi were expected to announce details of the plan at a press conference later Tuesday.
Under the scheme approved by Prime Minister Naoto Kan on Monday, JAL will slash roughly 16,000 jobs, or about 30 percent of its group workforce by the end of March 2011, public broadcaster NHK and Kyodo News reported.
JAL's main creditors will offer a 521.5-billion-yen debt waiver.
The court is expected to give its approval in November, with JAL's capital to be reduced to zero and then replenished through a 350-billion-yen capital injection from the government's turnaround body, the reports said.
The carrier will also cut 45 money-losing flight routes, or 30 percent of domestic routes and 40 percent of international routes, from the end of September through the end of March 2011.
Separately, Japanese Transport Minister Seiji Maehara told reporters Tuesday that JAL's revival plan would include the launch of a low-cost airline.
"What's most important is the steady implementation of the rehabilitation plan," he said. "We will supervise for that purpose."
After improving its balance sheet, JAL aims to go public again by the end of 2012.
The government asked charismatic entrepreneur Inamori, founder of high-tech company Kyocera and an ordained Buddhist monk, to turn around the former state-run company.
The ailing carrier delayed submitting its restructuring program to the court by two months until the end of August to give it more time to refine cost-reduction measures.
The company has been negotiating with its creditors for fresh financial support under the program, having faced pressure to speed up its plan to return to health.
Since filing for bankruptcy, JAL has been reducing flights and pulling out of unpopular routes, while being eclipsed by All Nippon Airways as the top Japanese carrier in terms of passenger volume and cargo.
JAL has already said it will scrap 28 international routes and close 11 international bases, while 50 domestic routes will be terminated, along with eight offices.
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