JAL Shares Up After Government Agreed To Provide More Aid

Japan Airlines CorpThe credit line of Japan Airlines Corp. has been increased to double by the government and the state-backed Development Bank of Japan.

On the back of the news, Japan Airlines Corp.’s shares rose over 36% at Y91. On Wednesday, JAL had seen a drastic fall of 23.9 percent to 67 yen.

It was after the fall in prices that the Cabinet ministers including Transport Minister Seiji Maehara and Vice Prime Minister Naoto Kan agreed on the increased credit line from the state-backed Development Bank, and the company saw a rise in its market value once again.

To return to profitability the company plans thousands of job cuts and a drastic reduction in routes.

"Worries about funding in the short term have been resolved. But investors have to see concrete restructuring plans to see whether it will be court-led or out-of-court restructuring”, said Takahiko Kishi, an analyst at Mizuho Investors Securities.