Price of JAL shares plunges to 8 cents

By Shino Yuasa

Associated Press

Shares in Japan Airlines Corp. nosedived 81 percent to just 8 cents Wednesday amid expectations the money-losing airline will file for bankruptcy protection as soon as next week and be removed from the stock exchange.

Investors dumped shares in the airline, known as JAL, with the stock plunging 30 yen — the maximum one-day decline allowed in JAL’s stock — from Tuesday’s finish of 37 yen.

Asia’s biggest airline is set to file for bankruptcy protection as early as Tuesday, with its shares to be removed from the Tokyo bourse, Japan’s top business daily Nikkei and the major daily Asahi said.

“Investors are rushing to unload JAL shares before they become worthless. The reports that JAL could be delisted sparked massive selling,” said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd.

While JAL is teetering on the brink of bankruptcy, its access to Asia is a prized asset for other airlines.

Delta Air Lines Inc. and American Airlines are vying for a stake in JAL to secure it as a partner and expand their Asian networks.

American Airlines, along with its alliance partners, on Tuesday boosted its offer of support to JAL to keep the airline with the one-world family.

American, British Airways, Qantas and Cathay Pacific Airways said they are ready to inject $1.4 billion cash into Japan’s flagship carrier. They will also guarantee $2 billion in revenue over the next three years if JAL stays in the alliance.

Delta and its SkyTeam partners have offered $1 billion, including a $500 million equity investment.