Japan Airlines sought to reassure the travelling public yesterday that it will keep flying despite declaring bankruptcy as its share price dropped to a new record low of just two US cents.
The debt-laden carrier apologised in full-page newspaper advertisements for causing "tremendous worries to customers" and promised that "JAL will keep flying" and that passengers' air miles will remain valid.
"Please be reassured and use us as before," the company pleaded.
The once iconic airline, a symbol of Japan's rise to prosperity, filed for bankruptcy protection on Tuesday with $26 billion in debt in the country's biggest post-war corporate failure outside the financial sector.
It is set to undergo a painful overhaul under a new corporate chief, with more than 15,600 jobs to be cut, reducing the workforce by a third, and many loss-making routes expected to be slashed.
JAL, which carries more than 50 million passengers a year, is set to receive almost $10 billion in public funds and emergency loans under a three-year turnaround plan.
Cabin crew have changed their in-flight announcements, now promising passengers that the airline is "striving for an early revival."
"We ask for your continued patronage of the JAL group," a cabin attendant said in a choked voice as she rehearsed the announcement before television cameras at a meeting at Tokyo's Haneda airport.
The Tokyo Stock Exchange will delist JAL shares by February 20, a move expected to wipe out shareholders' investments.
JAL shares closed at a new record low of two yen (two US cents), down three yen or 60 percent from Tuesday.
The company has made no announcement regarding its tie-up talks with American and Delta Air Lines, which are in a bidding war for a slice of the carrier, eyeing its lucrative Asian landing slots.
JAL is understood to prefer switching its alliance from the American Airlines-led Oneworld grouping to SkyTeam with Delta.
The government has tapped Kazuo Inamori, a 77-year-old entrepreneur and ordained Buddhist monk, to run the stricken airline during its overhaul, replacing Haruka Nishimatsu, who resigned as president Tuesday.
JAL's woes, analysts said, are the result of years of bad management, high costs stretching back to its days as a state-owned flag carrier as well as government pressure to service unprofitable routes to small domestic airports.
JAL was also hit particularly hard by the global economic downturn because it has a bigger network of overseas flights than its smaller rival All Nippon Airways, which was supported by relatively stable demand on domestic routes.
Shinsei Securities credit analyst Yasuhiro Matsumoto said JAL's turnaround plan involved "getting rid of money-losing businesses to return to profit and is not based on unfounded optimism that travel demand will grow in the future."
However, he said, the government still "has no growth strategy. It doesn't have a strategy on how JAL should design its international network."
Standard & Poor's said its credit ratings on Japan's financial institutions and insurance companies - many of which are owed money by JAL - would be unaffected by a request for a debt waiver of billions of dollars.