Japan Airlines Corp. filed for bankruptcy Tuesday under the Corporate Rehabilitation Law in the biggest nonfinancial corporate failure in the postwar period, reports The Japan Times.

The country’s flagship carrier is expected to continue flying and honor tickets with government assurances for lifeline funds, while undergoing a three-year rehabilitation process that is expected to entail massive cuts in jobs and in unprofitable routes, both domestic and international.

The airline’s debts are estimated at ¥2.3 trillion.

JAL President Haruka Nishimatsu resigned to take responsibility for the airline’s failure.

“Today, the government, creditor banks, shareholders and Japanese people have given us a last chance (to reconstruct the company),” Nishimatsu said.

The government-backed Enterprise Turnaround Initiative Corp. of Japan will lead JAL’s restructuring, and Kyocera Corp. founder Kazuo Inamori will be the carrier’s new CEO.

ETIC officially declared it will resurrect JAL under court-supervised rehabilitation that will involve massive public funds.

“JAL plays a key role in our nation’s aviation network, which is a development base of our nation, so needed supports will be provided until it will be reconstructed,” transport minister Seiji Maehara said.

Prime Minister Yukio Hatoyama also pledged the government’s help.

Read more here.

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