It has emerged that Japan Airlines (JAL) will benefit from a tax break from the government as it returns to profitability. JAL does not have to pay US$4.5 billion in taxes on future profits.
All Nippon Airways has been lobbying government officials to either end the tax break or level the playing field by giving ANA preference in the allocation of landing spots at Tokyo’s Haneda airport when those become available in 2014.
The tax break could give JAL a significant advantage over its rivals particularly as JAL is expected to raise US$8 billion from an IPO to be launched in September.
JAL has also benefited from a tweaking of the tax code. Last year an exemption was added to allow Japanese companies already in reorganisation to continue to use 100% of their cumulative losses to offset tax for seven years.