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Peach Aviation said Friday it will reduce its capital to ¥100 million, aiming to pay less in taxes to make up for cumulative losses due to the pandemic.
Peach’s move was the latest in a series of announcements by Japanese low-cost carriers (LCC) on capital reductions following a steep decline in the number of travelers due to COVID-19.
Peach, which is under the wing of ANA Holdings Inc., will reduce its capital from ¥7.52 billion to ¥100 million on March 30. It will also withdraw all its capital reserves totaling ¥7.49 billion and re-register them as additional paid-in capital.
Zipair Tokyo and Spring Airlines Japan, both LCC arms of Japan Airlines, have already unveiled plans to reduce their respective capital and capital reserves to ¥100 million by the end of next month.
Companies with capital of ¥100 million or less are regarded as small businesses and have lighter tax burdens.
Last year, another budget carrier, Skymark Airlines, reduced its capital to ¥100 million.
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