JAL's bankruptcy to affect small businesses in Japan

Bankruptcy filing by the Japan Airlines Corporation (JAL) is anticipated to have an adverse affect on several SME firms that do business directly with the carrier. This was revealed in a survey conducted by the Tokyo Shoko Research Ltd (TSR). About half of the approximately 3,000 companies that are engaged in direct dealings with JAL belong to the SME sector.

The survey findings reveal that about 2,910 firms have corporate relations with JAL group of companies, while another 10,424 companies do business with the carrier indirectly. The restructuring of JAL is likely to threaten the sustenance of many of its corporate clients and small business partners. According to the credit research company, nearly 13,334 domestic business partners are feared to be affected by the carrier's bankruptcy filing.

TSR further cautions the SME sector in Japan that the restructuring of the JAL Group will lead to plunge in sales and other negative effects. However, based on the existing contracts, JAL will make payments for general business transactions despite undergoing legal bankruptcy proceedings.

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