The Tokyo District Court on Wednesday approved a rehabilitation plan for failed Air Do, now in the process of court-mandated restructuring under the civil rehabilitation law.
The approval came after the insolvent airline, officially known as Hokkaido International Airlines, obtained support for the reform plan from its creditors at a meeting at the court earlier in the day.
The plan calls for it to use all of its 7.2 billion yen in base capital to pay off its debts and calls on creditors to give up 90 percent of their 3.94 billion yen investments in the airline.
Upon approval, the Sapporo-based airline is expected to ask Hokkaido businesses to put up 2 billion yen to 3 billion yen in fresh capital, company officials said.
With closer ties to All Nippon Airways, Air Do is projecting a net profit of 119 million yen in the 2003 business year.
“We must revive Air Do as a new company in return for the support that our shareholders and creditors provided for us,” Air Do President Michimasu Ishiko said. “Although we still have several hurdles to get over, such as beefing up our capital and the selection of a new management team, we would like to hammer out the overall plan as early as possible.”
Ishiko and other executives in his management team are expected to step down after the company secures the new capital.
Air Do had previously entrusted Japan Airlines with the maintenance of its aircraft but transferred the task to ANA at the end of October.
The carrier plans to start sharing reservation and ticketing systems with ANA in December, and the two are expected to begin jointly operating domestic flights in February.
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