MIAMI – Japan Airlines (JL) is considering raising as much as ¥300bn (US$2.9bn) in subordinated loans and plans to start talks with a group of banks on the financing, Kyodo News reported on Monday.

It is expected the airline will report around an ¥85bn (US$807.5m) loss from its main business for the three months through September. A JL spokeswoman, declining to comment on the report by Kyodo, said the airline has enough liquidity in hand.

Many global airlines, facing losses due to the coronavirus pandemic, are seeking to secure their finances through debt and government aid.

All Nippon Airways Boeing 737-881 JA55AN. Photo: Kochan Kleps

ANA Also Reports Loss, Considers Layoffs

Rival ANA Holdings (NH) expects a net loss of around ¥500bn (US$4.8bn) for the year to March. It is eyeing cuts to both jobs and its aircraft fleet, a source with direct knowledge said last week. In addition, is reporting that the airline is considering “reducing its workforce by 3,500 employees in the next three years.”

Reuters reported that the move is part of the company ‘s business turnaround plan to reduce fixed costs as low travel demand is expected to continue due to the Covid-19 pandemic, citing the Japanese newspaper Yomiuri. As of last year, ANA had a workforce of 43,500.

Japanese private equity fund, Advantage Partners, is looking to invest in domestic airline Star Flyer (7G). ANA is its largest shareholder, Kyodo News reported on Monday.

Star Flyer is planning a third-party allocation of new shares to raise about ¥10bn (US$95m). Advantage Partners is looking to take part on condition that existing shareholders also participate, Kyodo said, citing sources.

Neither 7G officials nor officials at Advantage Partners were immediately available for comment. ANA owns an 18% stake in 5G. Other investors include toilet maker Toto, Yaskawa Electric Corp., and Nissan Motor Company.

Featured image: Japan Airlines Boeing 787 Dreamliner. Photo: Eric Salard