Japan carrier's IPO issues priced at top of range

TOKYO (AP) — Japan Airlines Co. is raising 663 billion yen ($8.5 billion) in its initial public offering, pricing its shares at the top of its range at 3,790 yen ($48) — the world's second biggest IPO this year after Facebook.

The carrier, which went bankrupt in 2010, will be nearly doubling the money the government-backed bailout body pumped in. It announced the pricing Monday, the highest in a range that started from 3,500 yen ($45), underlining healthy demand for the shares.

The 175 million issues are set to be listed and traded on the Tokyo Stock Exchange on Sept. 19.

The carrier, also known as JAL, was long the symbol of Japan's economic rise. In recent decades, it was hobbled by a bloated workforce, unpopular routes and safety lapses.

Under the bailout, it has carried out cost cuts and job reductions, trimming a third of its payroll, and investing in low-cost carriers, to return to solid profitability — even inviting criticism that the bailout might have been unfair for the rival carrier in Japan, All Nippon Airways, which had made gains when JAL was struggling. In addition to the bailout, JAL will get giant tax breaks.

Japan Airlines posted a profit 187 billion yen ($2.4 billion) profit for the fiscal year ended March 2012, an impressive feat considering the battering global carriers have been taking with price competition and surging oil prices.

ANA, in contrast, recorded a 28 billion yen ($356 million) profit for the fiscal year through March 2012.

JAL built its image on a reputation for courteous service and punctuality, but racked up mountains of debt and was forced to apply for bankruptcy.

The industry remains highly competitive, and JAL still faces challenges as it has not widened its appeal with global flyers. Japanese are also increasingly opting for deals and are no longer as loyal as they used to be to Japanese carriers.

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