Japan Airlines files for bankruptcy protection

TOKYO (AP) — Japan Airlines has filed for bankruptcy protection in one of the biggest corporate failures in Japanese history.

A state-backed corporate turnaround agency said today it received confirmation from the carrier that it had applied for protection from creditors under the Corporate Rehabilitation Law — Japan’s version of Chapter 11.

The widely expected move culminates a process that began in October when Asia’s biggest airline first turned to the Enterprise Turnaround Initiative Corp. of Japan for help. It was saddled with debts of 1.5 trillion yen ($16.5 billion), falling passenger traffic and swelling pension costs.

JAL will now embark on a massive overhaul under a prepackaged restructuring plan to shed the fat and inefficiency that undermined its finances.