travel pulse   |   February 09, 2010

Delta, AA Compete with Cash for Japan Airlines Alliance

Published on: November 20, 2009

Delta Air Lines and American Airlines are fighting over a minority stake in Japan Airlines (JAL), which is facing financial challenges. Both U.S. carriers are hoping to use such an alliance to further expand their reach into Asia. Delta and its partners in the SkyTeam alliance yesterday reportedly offered $1 billion to JAL. The Japanese carrier currently is a member of the oneworld alliance (www.oneworld.com), which includes American, British Airways, Cathay Pacific, Finnair, Iberia, LAN, Malev, Mexicana, Qantas, Royal Jordanian and Skyteam (www.skyteam.com)includes Aeroflot, AeroMexico, Air France, KLM, Alitalia, China Southern, CSA Czech Airlines, Delta, Korean Air, Air Europa and Kenya Airways.

The offer from Delta and the SkyTeam alliance reportedly includes a $500 million capital investment, $300 million in short-term revenue guarantees and $200 million in asset-backed financing for the airline. SkyTeam said it also would cover the cost for JAL to move from the Oneworld alliance. JAL needs an injection of capital and government help to avoid collapse. It reported a $1.5 billion loss for the first half of the year. But JAL may not be that receptive to the Delta and Skyteam overture. President Haruka Nishimatsu said last week that it would be easier for the airline to remain within the oneworld alliance.

For its part, American said it was still committed to JAL, saying that sticking with Oneworld would be its best path toward recovery and future growth. “American and its oneworld partners are confident that the total value proposition they offer JAL is superior in every way to any alternative,” American said. “American stands ready to make a significant investment in JAL and remains confident that an American-JAL partnership can readily obtain antitrust immunity as early as the middle of next year, which would allow JAL to realize approximately $100 million in revenue annually in future years.” For more information, visit www.delta.com, www.aa.com and www.jal.com.




More Headlines Like This ...

 
 
Performance Media Group, LLC, is an Inc. 5000 company