JAL likely to choose Delta over American

[Matt Molnar]

JAL likely to choose Delta over American - Asahi (http://www.reuters.com/article/idUSTFA00653020091218)

TOKYO, Dec 18 (Reuters) - Japan Airlines Corp (9205.T) is likely to choose Delta Air Lines (DAL.N) as its overseas alliance partner, leaving behind its current partner American Airlines (AMR.N) and the Oneworld alliance group, Japan's Asahi newspaper reported on Friday.

JAL has decided that moving to the SkyTeam alliance would be a bigger advantage for the restructuring and future growth of the debt-laden carrier, the paper said without citing sources.

JAL officials were not immediately available for comment.

American Airlines has said it and other members of the Oneworld airline alliance along with private equity fund TPG are willing to invest $1.1 billion in JAL to prevent it defecting to Delta Air Lines (DAL.N) and the rival SkyTeam group. [ID:nT194302]

Delta has said that it and other SkyTeam members are ready to offer JAL a total financial aid package of about $1 billion, including a $500 million equity investment. Delta has also said it may also team with a fund to sweeten its proposal. (Reporting by Mariko Katsumura)

[NLovis]

Well we can only see where this goes now

[T-Bird76]

Well we can only see where this goes now

If this happens it means One World is going to have a HUGE hole in its ability to serve the Far East and lose millions a year in revenue.

[hiss srq]

This is a huge deal for Delta considering their ambitious ideas for Asia. As it is with NWA's markets etc in their back pocket they are formidable but with JAL in the picture for them there really is no competition as far as US carriers into the far east. From JAL's perspective this will really give them soo much more access to markets in Europe too via DL/KL/AF.

[ChrisW]

If this happens it means One World is going to have a HUGE hole in its ability to serve the Far East and lose millions a year in revenue.I'd venture to say the loss to the oneworld alliance would amount to BILLIONS of dollars. That being said, that's the general idea. 8)

[PhilDernerJr]

Chris might be right. If it wasn't worth that much, American wouldn't be willing to invest a billion, no?

[ChrisW]

How much money can Delta make American pay for JAL? :borat:

[ChrisW]

Delta: 1. American: 0.
We have learned for industry sources that Delta Air Lines has won the battle and that Japan Air Lines will be leaving the oneworld alliance to join SkyTeam, reports Ernie Arvai of the AirInsight team of which Leeham Co. is a member. This is a significant blow to American Airlines, which now lacks a Japanese partner, and boosts both United (Star Alliance partner with ANA) and Delta (with NW Japanese routes and now JAL) that can be well exploited, given the new open skies agreement between the two countries.http://leehamnews.wordpress.com/2009/12/18/delta-ousts-american-in-jal-global-alliance/#more-2488

[T-Bird76]

Chris might be right. If it wasn't worth that much, American wouldn't be willing to invest a billion, no?


Mr. Panagiotoulias said American would offer JAL an equity investment on top of the approximately $500 million that the Japanese airline is reaping annually from its participation in the Oneworld alliance. American is the operating unit of the AMR Corporation of Fort Worth, Tex. Delta is based in Atlanta.

One can estimate that AA's take is in the same ballpark, which would be a significant loss.

[NLovis]

well thats that. I forsee One world collapsing in the future. There the weakest alliance of the 3 by far now. Only single didgit full members with only a handful as big name carriers. Partial members might steer to star alliance or sky team now to get more revenue