Shares of Japan Airlines fell to their lowest since they were re-listed in 2002 on doubt over the cash-strapped airline’s ability to recover, even with aid from creditors, investors said on Friday.
Japan’s biggest airline has asked creditors for 600 billion yen ($6.63 billion) in financial aid, sources have told Reuters.
But the lack of a clear growth plan for JAL is fueling market concern the rescue package might be throwing good money after bad, some investors said.
“There’s increasing concern about the future of the company and whether it’s heading for a GM-style bankruptcy or not,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
The size of the rescue package could seriously dent the cash-strapped bank’s creditors, some investors said.
Kyodo news agency earlier on Friday said JAL was reconsidering a plan to sell shares in its group firms, indicating that the restructuring efforts needed to turn the company around might be slow to come.
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Shares in JAL fell 10.5% to 102 yen, hitting the lowest since the airline carrier relisted as the holding company of JAL and Japan Air Systems in October 2002. Its shares have shed 25% in one week.
Tokyo’s banking index fell 2% on Friday. Shares in JAL’s major creditor Mizuho Financial Group fell 2.3%.
“Even if they do get the funds, where is the prospect of growth? I don’t see it,” said another portfolio manager at a Japanese asset management firm, who asked not to be named as he was not authorized to comment on individual stocks. ”
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