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Publication Date : 21-09-2012
Japan Airlines' total market value has reached 694.5 billion yen, surpassing that of All Nippon Airways, after its shares were relisted on the First Section of the Tokyo Stock Exchange.
JAL returned to the stock market on Wednesday about two years and seven months after being delisted.
The government's Enterprise Turnaround Initiative Corporation (ETIC) sold all JAL shares that it held in exchange for the bailout, completing its rehabilitation assistance for the company.
However, ANA and other rival airlines criticised the government-backed rehabilitation, saying it had made the competitive playing field uneven.
JAL's recovery also prompted questions as to how the government should rehabilitate companies.
Based on the company's closing stock price on Wednesday, JAL's total market value hit 694.5 billion yen, exceeding ANA's 632.9 billion yen.
Kazuo Inamori, the honourary chairman of JAL who played a leading role in its business rehabilitation, said at a press conference Wednesday: "I desperately wanted to rebuild [JAL], but wasn't sure we could do it. I feel vindicated now that we've done it."
JAL went bankrupt in January 2010. Since then, the airline has implemented drastic restructuring measures, including withdrawal from unprofitable routes and cuts of more than 16,000 jobs.
As company chairman, Inamori also made efforts to change attitudes within the company.
Hideo Seto, a lawyer and head of the ETIC who attended the press conference with Inamori, said, "Although JAL was said to be a bad company, we were able to show that it could rehabilitate itself under skillful management and if its credit could be supplemented."
Regarding JAL's rehabilitation, Hitotsubashi University Professor Hirotaka Yamauchi said, "As it was able to maintain competitiveness between two major airlines, JAL and ANA, the public assistance was sufficient."
After the relisting, the ETIC recovered about 650 billion yen, far greater than the 350 billion yen it invested.
As a result, new burdens on taxpayers were avoided.
Finance Minister Jun Azumi said Wednesday that profits from the ETIC's sale of its JAL stocks will in principle be used to finance reconstruction from the Great East Japan Earthquake.
JAL President Yoshiharu Ueki said at a press conference: "For many years, we were unable to make sufficient investments. But from now on, we'll make efforts to provide more attractive products and services."
However, ANA and Liberal Democratic Party members have criticised the rehabilitation, saying JAL's good performance is due to an unfair environment for competition.
Land, Infrastructure, Transport and Tourism Minister Yuichiro Hata said Wednesday, "We'll closely watch JAL's rehabilitation progress to see whether the public assistance has distorted the circumstances of competition."