Japan Airlines agrees staff pension cuts

JAL is struggling with mounting debts

Shares in Japan Airlines (JAL) rose again on Tuesday after more than two-thirds of its staff agreed to pension cuts.

The airline needs employees to agree to cuts in order to reduce its $3.6bn (£2.2bn) pension deficit and qualify for a state bail-out.

JAL shares rose by 3.4%, adding to the 31% jump seen on Monday.

On Sunday, the Japanese government agreed to double its offer of state-funded credit to the ailing airline.

JAL now has access to 200bn yen ($2.2bn; £1.3bn) of credit, although it has already made use of 55bn yen of that.

Separately, the airline applied for a government bail-out in October last year through the Enterprise Turnaround Initiative Corporation of Japan (ETIC) – a body able to draw on taxpayers’ money to prop up the business while it restructures.

A decision on that is due before the end of January, but the ETIC requires cost-cutting concessions including restructuring of pension arrangements.

JAL is battling 1.5 trillion yen of debt, and has been hit hard by the global fall in demand for air travel. — BBC News