Japan Airlines plans to raise 151.5 billion yen (US$1.4 billion) from banks and business partners to buy fuel-efficient aircraft and reduce its mountain of debt.

Asia's biggest carrier has been overtaken on most performance measures by All Nippon Airways and desperately needs to update a fleet stocked with old, fuel-guzzling jumbo jets.

It has been reducing staff and unpopular routes and selling non-core assets but its debt load, at 1,700 billion yen, the biggest among Asian carriers, has hurt its ability to make new investments.

JAL said it would sell non-voting preferred stock to 14 investors including UBS and local banks, trading companies and fuel suppliers. Two-thirds of the proceeds will go on the fleet but the infusion will also help it cut interest-bearing debt to a forecast 966 billion yen by March 2011.