With combined liabilities of 2.3 trillion yen, Japan Airlines and two core subsidiaries applied to be placed under court-administered bankruptcy and reorganization on Jan. 19. This is the first installment of a three-part series examining the failure of the national flag carrier.

On Jan. 12, a torrent of JAL group employees withdrew from a workers association that holds shares in the airline. With the share price heading south, the employees were desperate to quickly reclaim their stock certificates and cash them in.

Contract cancellation documents at JAL's office at Haneda Airport ran out in the morning. An administrative official had to prepare extra copies to cope with the demand from anxious workers.

The scramble to get rid of the certificates was triggered by reports that the government was preparing to bite the bullet and put the ailing carrier under court-administered rehabilitation.

JAL employees, who had long assumed they were insulated against any risk of bankruptcy because the government would always be there to bail them out, had come to the realization that this time the government would not ride to the rescue.

JAL, born as a state-owned airline, had always worked hand in glove with the government.

JAL had a monopoly on regular international flights until 1986, and had provided airplanes exclusively for the Imperial family and important dignitaries. Even after being fully privatized in 1987, the airline provided cushy jobs for bureaucrats who retired from government offices earlier than the mandatory age of 60--a practice known as amakudari.

Former high-ranking bureaucrats held the positions of either the company president or chairman until Isao Kaneko was appointed to both roles in 1998.

JAL even had a hand in tasks normally the reserve of the government. "JAL was involved in compiling statistics of embarkation and disembarkation cards, and created the foundation for fare regulations, among other jobs," a former board member said.

JAL's old headquarters in Tokyo's Marunouchi district were often mockingly referred to as "a branch office of the transport ministry." In return for effectively working as a subcontractor of the government, JAL naturally received various rewards in return.

One of the biggest perks was being placed in charge of coordinating landing slots for international routes originating from Japan, at the request of the Land, Infrastructure, Transport and Tourism Ministry. The secretariat in charge of this task was located inside JAL until it moved to a third-party corporation in 2008. For a long time, five of these secretariat members were from JAL.

Information on JAL's main rival, All Nippon Airways, quite probably found its way into JAL hands.

ANA officials joined the secretariat in 2004 after raising questions about its transparency and impartiality. However, the secretariat remained headed by people with close ties to JAL until 2008.

This situation caused considerable consternation at ANA. "It's a case of you scratch my back, I'll scratch yours at the secretariat," a senior ANA official grumbled.

The ANA official also suggested JAL was telling only one side of the story when it complained that politicians and the government had forced it to retain unprofitable regional routes.

"In return, it got lucrative landing slots at Haneda Airport," the official said, implying it was unreasonable to whine that JAL's losses swelled because of these routes.

Writing was on the wall

Some transport ministry officials could see trouble looming months ago when the Democratic Party of Japan was becoming more likely to sweep to victory in the August House of Representatives election. They were concerned JAL had not done enough to cozy up to the incoming party.

In June, a senior ministry official berated a senior JAL official for failing to build closer ties with DPJ lawmakers.

"Have you gone to greet the lawmakers?" the official said. "What are you thinking?"

Prime Minister Yukio Hatoyama's administration was launched in September. As rumblings about reconstructing the cash-strapped airline grew louder, JAL suddenly realized it had no "cheerleaders" in the government. As bankruptcy drew nearer, JAL and the transport ministry's Civil Aviation Bureau found themselves out of the loop and channels of information shut off.

Senior JAL management still appeared unwilling to accept that bankruptcy was a prospect, even after catching wind that the government was leaning toward bankruptcy protection.

"It's just one option," a senior manager insisted.

In the end, a company that relied totally on the political world was tripped up by a shift in power in the political arena.