TOKYO (AP) — Japan Airlines filed for one of the country's largest bankruptcies ever yesterday, entering a restructuring that will shrink Asia's top carrier and its presence around the world.

Staggering under a $25.6 billion debt mountain, the carrier applied for protection from creditors under the Corporate Rehabilitation Law — Japan's version of Chapter 11 — with the Tokyo District Court.

Japan's flagship airline will slash nearly 16,000 jobs, reduce pensions for retired staff, cut routes and shift to more fuel-efficient aircraft as part of its restructuring.

Some $10 billion of government cash will keep JAL's planes in the air during the reorganisation. Lenders will forgive $8 billion in debt, and JAL shares will be removed from the Tokyo Stock Exchange on February 20, wiping out investors.

There was no word on the outcome of a fierce tug-of-war between Delta Air Lines and American Airlines for a slice of JAL's business. Despite its woes, the airline's access to Asia is a mouth-watering prize for foreign airlines.

A state-backed turnaround agency pledged 900 billion yen ($10 billion) in financial support for JAL — 600 billion yen in credit lines and a 300 billion yen cash infusion.