UPDATE 2-JAL steps up route closures to cut costs

TOKYO, Nov 5 (Reuters) - Japan Airlines Corp said it would eliminate 17 more routes to cut $78 million in costs a year and is considering further route closures as it scrambles to turn around its loss-making business. The latest route reductions by Asia's largest airline by revenue came after it applied for assistance from a state-backed corporate turnaround body, setting the stage for a large injection of public funds into the troubled carrier. By closing the 17 unprofitable routes, which include flights between Tokyo's Narita airport and Mexico as well as between western Japan's Kansai airport and Hanoi, JAL expects annual cost reductions of 7.1 billion yen ($78 million). "JAL is bleeding everyday. We decided we need to do something as soon as possible," Manabu Sato, JAL deputy general manager of corporate affairs, told reporters. "We are thinking of cutting more routes to achieve a turnaround," he added. Including those announced previously, the carrier will terminate flights on 30 routes, including 13 international, by June. JAL is headed for its fourth loss in five years, weighed down by $15 billion in debt and crippling pension costs and it is under pressure to restructure its bloated flight routes. Shares of JAL closed down 1.8 percent at 111 yen, while the benchmark Nikkei average fell 1.3 percent. (Reporting by Nobuhiro Kubo, Taiga Uranaka; Editing by Chris Gallagher) (([e-mail]; [phone]; Reuters Messaging: [e-mail])) ($1=90.60 Yen) Keywords: JAL/ (If you have a query or comment on this story, send an email to [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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