Less than three years after Japan Airlines collapsed into bankruptcy, its shares are again being traded on the Tokyo stock exchange.
After being relisted those new shares rose one percent.
They have mostly been bought by small individual investors, impressed with JAL’s turnaround after it cut about a third of its workforce, slashed pension payouts and retired less fuel efficient planes.
The initial public offering of the new shares had been priced conservatively to take account of the airline industry’s tough outlook.
Full-service carriers such as JAL are under threat from low-cost operators in an already weak economy.
While JAL estimates that three-quarters of its efficiency gains are due to job cuts and other structural reforms, its jump from industry basket-case to profit leader would not have been possible without massive state and private aid.
Banks forgave about 520 billion yen in debt. The write-down of its ageing fleet has put a huge dent in its depreciation expenses. Perhaps most significantly, it is sitting on 1.1 trillion yen in loss carryforwards, which could translate into a $4.5 billion corporate tax break stretched over nine years.
JAL has used its new-found financial muscle to order 45 Boeing 787 Dreamliners, a fuel-efficient jet positioned as crucial in its efforts to trim costs and increase seat capacity on international routes by 25 percent over five years.
Rival ANA has cried foul, charging the tax breaks and other aid have created an unfair playing field. Behind the scenes it has lobbied for concessions, such as preferential allocation of landing slots coming due at Tokyo’s Haneda airport around 2014.