In light of revenue losses triggered by the SARS outbreak, the state-run Development Bank of Japan has loaned 70 billion yen to Japan Airlines System Corp. and is planning to lend about 15 billion yen to All Nippon Airways Co., government officials said Monday.
The ANA loan may be extended Tuesday.
The scare over severe acute respiratory syndrome has bludgeoned international passenger numbers, particularly those traveling to China, the officials said.
The JAL group expects its operating revenue for fiscal 2003 to dive by 162 billion yen on a year-on-year basis, while ANA says it fears a revenue drop of 42 billion yen.
The JAL group had requested a DBJ loan of 130 billion yen, with ANA seeking a loan of 50 billion yen.
The DBJ loans are designed to mitigate the effects of the revenue decline in the first six months of the business year, the officials said.
By the end of the fiscal year, the lender plans to provide additional loans to soften the impact of revenue falls the two airlines will probably suffer in the second half, they said.
The DBJ and the Land, Infrastructure and Transport Ministry have demanded that the airlines implement cost cuts in exchange for the loans.
They are expected to come under further pressure to implement additional cost-cutting measures, such as personnel cuts, industry sources said.
The two airlines plan to use the loans to redeem their outstanding corporate bonds and implement capital outlays on new equipment, the officials said.
In May, the government decided to provide low-interest loans to the pair to assuage the SARS impact.
The DBJ had earlier loaned 154 billion yen to the JAL group and 85 billion yen to ANA to shield them from the impact of passenger falls stemming from the Sept. 11, 2001, terror attacks on the United States.
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