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Japan Airways plans to boost $ 2.7 billion – sources

© Reuters. FILE PHOTO: Japan Airlines (JAL) aircraft are seen amid the coronavirus disease (COVID-19) outbreak at Tokyo International Airport, commonly known as Haneda Airport, in Tokyo, Japan on October 30, 2020. REUTERS / Issei Kato

TOKYO (Reuters) – Japan Airlines Co Ltd (JAL) plans to raise 300 billion yen ($ 2.72 billion) to deal with anticipated funding problems amid an ongoing collapse in air traffic, two sources familiar with the matter said Thursday .

The funds will be raised through funding that includes subordinated loans, according to the sources, which confirmed a previous report https://s.nikkei.com/38ShGaE.

JAL, which raised $ 1.8 billion in a stock sale last November, declined to comment.

The airline posted an operating loss of 82.65 billion yen for the first quarter last month, a year-over-year improvement as pandemic-induced cost reductions took effect and travel demand rose from very low levels.

JAL, like other airlines, has burned cash reserves to hold jets and workers who will need it when travel demand picks up again.

The airline announced last month that its cash burn rate would decrease from 10 billion yen to 15 billion yen in the first quarter to about 5 billion yen per month in the second quarter, ending September 30.

Rival ANA Holdings Inc raised $ 3.8 billion in subordinated loans and $ 3.2 billion in equity last year to help weather the pandemic and fund purchases of new aircraft.

JAL stocks lost 1.8% in morning trading, compared to a 0.4% decline in the broader market.

($ 1 = 110,1600 yen)

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