Japan Airlines is expected to be declared bankrupt, possibly as early as this week, despite offers of aid from US rivals that could rescue the stricken carrier.
The airline, which is the biggest in Asia but is burdened with debts of £10bn, will file for bankruptcy as part of a state-sponsored restructuring that is likely to see it emerge slimmed down and ready to renegotiate with its partners.
The move could have significant implications for British Airways, which is a partner with American Airlines and Japan Airlines in the Oneworld Alliance.
Government officials said they would reject offers of equity investment in the airline from American and Delta Airlines, which is part of the rival SkyTeam grouping, ahead of a bankruptcy filing.
They said the government planned to put in new management and restructure the company before seeking to negotiate with rival airlines over possible tie-ups.
Delta and American have been courting Japan Airlines with rival offers of financial aid, backed by private equity partners. A move by Japan Airlines to join the SkyTeam group would limit BA's links to other far east destinations and curb growth in some of its most profitable routes.
However, it could be several months or even years before a decision is made after the state-backed turnaround fund, ETIC, which is in charge of deciding whether Japan Airlines should be propped up with public money, made it known that any decision on its overseas partner should be taken in co-ordination with new management.
An official told Reuters that ETIC planned to inject about ¥300bn (£2bn) of fresh capital into the carrier, provided it goes through with the bankruptcy filing and banks agree to waive ¥350bn in debt.
Got this from the Gaurdion, so anyone interested should check this out for themselves and make whatever moves they deem appropriate.