Japan prefers piecemeal approach to big bailout for carrier ANA

Japan’s government is in no mood for a huge bailout plan for ailing airline ANA, sources say, preferring a piecemeal approach to direct capital injections - a stark contrast to the bold moves other countries have made to protect flagship carriers. Forecast to suffer a net loss of about $4.8b in the fiscal year to March, Japan’s largest airline is expected to announce a revival plan next week that will most likely include pay cuts and reduction in its fleet of aircraft. The government hopes a waiver on airport landing fees, a tax-funded domestic tourism campaign and a gradual re-opening of borders will be enough to keep ANA alive, said government and ruling party officials with direct knowledge of the matter. These measures will come on top of $3.8b in subordinated loans to ANA Holdings from state-backed and private lenders. The loans, cost cuts and capital accumulated during Japan’s inbound tourism boom in the past few years will allow ANA to weather the hit from COVID-19 at least for now, they said. Though nothing has been officially decided, the government is ready to offer more relief if a deepening economic slump worsens the plight of big companies with national impact such as ANA. But ideas being floated among government and political circles centre on tax breaks for aircraft and fuel, as well as extensions of existing programmes such as the tourism campaign and subsidies to companies that retain jobs, the officials said. More radical steps such as those taken by Germany, which did direct capital injection, are off the table for now, they said.<br/>