New reports show that the Japanese government has said that it will not guarantee funding for the debt ridden national carrier Japan Airlines. Finance Minister, Kirohisa Fujii, said that state budget for the next financial year would not include any such load guarantee. He went on to say that this is a matter that should be worked out by private companies.

The Development Bank of Japan is wholly owned by the state, but it has the status of a private bank, so the government should not meddle in its business. Thus, the government’s refusal to offer Japan Airlines further guarantees does not rule out the state owned Development Bank of Japan bailing out the struggling airline.

Back in November, the airline was able to secure an emergency load from the Development Bank of Japan, saying it was necessary for continuance of its flights. The full amount of the load that was granted to Japan Airlines has not been revealed by the carrier. However, reports do suggest that the airline needed a loan of about €1.3 billion, and it would have run out of cash by the end of November.

Japan Airlines is currently awaiting a decision from employees and former staff over a 40 percent cut in their pension. The 17,000 staff and 9,000 pensioners were told by the airline management that it faced bankruptcy if payments were not cut. More plans for future restructuring of the airline are also going to be announced in January. This restructuring is being overseen by the government’s Enterprise Turnaround Initiative Corporation of Japan.