JAL, Japan's biggest airline, has forecast that the woes of the aviation industry will push it into a loss for the current financial year.

JAL had previously forecast that it would earn 43bn yen (�245m; $353m) in the year to end-March, but has now revised that figure into a 50bn-yen loss.

The firm said it would be cutting 600 jobs, over and above 700 lay-offs announced earlier in the year.

At the same time, it slashed its dividend to shareholders from 3 yen per share to zero.

In hope of defraying some of the costs of higher insurance charges, JAL plans to raise fares on domestic flights by 500 yen, and on international flights by $5.

JAL has been hit hard by increased insurance costs, and suffers worse than Japan's other airlines, because it is the main international carrier.

Calls for aid

JAL has already reduced its US-bound schedules by almost one-quarter as a result of last month's attacks.

Japan's other major carriers, All Nippon Airways and Japan Air System, have not yet said whether they will pass on some of the burden to passengers.

As elsewhere, there has been a mounting campaign for government help for the airline industry.

The Japanese government has stepped in to guarantee third-party insurance up to $2bn to cover any shortfall in claims for six months.

But it is still considering whether the airline industry merits any more direct financial aid.