| JAL to keep its partnership with American Airlines rejecting offer from Delta Air Lines |
|
08/02/2010 14:09 (734 Day 10:17 minutes ago) | |||||
|
The FINANCIAL -- Japan Airlines, after declaring bankruptcy last month, has decided to keep its partnership with American Airlines, rejecting offer from Delta Air Lines, according to media reports Sunday.
But JAL's new management and the government-run Enterprise Turnaround Initiative of Japan, which supervises the airline's restructuring, believe the switch would be costly and risky for JAL, the Asahi and other dailies said, the same source reports. The embattled carrier feared that a switch to Atlanta-based Delta and SkyTeam would confuse its passengers and may not win antitrust immunity from US authorities because it would dominate the trans-Pacific market.
“Nothing is decided yet,” Satoru Tanaka, a spokesman for the Tokyo-based carrier, said today by phone, Business Week wrote. “We will make the decision by mid-February.”
JAL's new chairman, Kazuo Inamori, started from scratch in deciding whether Asia's biggest carrier by revenue should ally itself with Fort Worth, Texas-based American or Atlanta-based Delta in a joint venture on trans-Pacific flights, according to one person close to the deliberations, according to The Wall Street Journal. Mr. Inamori, who took over as JAL's chairman Feb. 1, has had conversations with officials in Washington focusing on whether a Delta-JAL tie-up would receive antitrust immunity, this person added.
The same source reports that after absorbing Northwest, Delta is the largest U.S. carrier in Japan, with a market share of more than 20% on flights between Tokyo and North America. American has a much-smaller market share, despite a longstanding code-sharing alliance with JAL.
JAL will make an official announcement this week, Asahi newspaper said. A JAL spokeswoman declined to comment. No one at the ETIC could be reached for a comment.
American and its Oneworld partners have offered $1.4 billion in capital and Delta has offered about $1 billion in financial aid in an effort to woo JAL, Reuters reports. However, the ETIC is not expected to invite another carrier to invest in JAL at this stage.
Despite its dire financial straits, JAL is in a prime position to capitalize on flights to Asia, which is the world's fastest growing aviation market, according to The Wall Street Journal reports. Last year, the Asia-Pacific travel market surpassed North America for the first time to become the world's largest, according to the International Air Transport Association, the industry trade body.
Business Week reports that Delta is a member of SkyTeam alongside carriers including Air France KLM Group, Korean Air Lines Co. and China Southern Airlines Co.
|
|
|
