Japan Airlines is in talks on securing up to JPY200 billion yen (USD$2.14 billion) in low-interest government loans and could also tap a new government initiative that gives businesses capital infusions, financial daily Nikkei said said on Thursday.

The Development Bank of Japan is making the long-term loans available to try to mitigate the effects of the global financial crisis.

JAL spokesman Taro Namba said his firm was not in talks with authorities for loans. When asked if the airline was considering such loans, he said that nothing specific had been decided.

JAL's passenger traffic and revenue have been falling and if the trend continued, the carrier could find itself low on funds later in the year, when it is due to buy aircraft and make other capital investments, the Nikkei said.

The paper said JAL should need about JPY200 billion to cover 2009/10 capital spending and bond redemptions.