Delta, JAL Alliance Talks Advance - Air France-KLM
By Maarten van Tartwijk and Bart Koster
Of DOW JONES NEWSWIRES
AMSTERDAM (Dow Jones)--Talks between Delta Airlines Inc. (DAL) and Japan Airlines Corp. (9205.TO) to persuade the Japanese carrier to switch alliances are advancing, Air France-KLM (AF.FR) confirmed Monday.
The struggling Japanese carrier is at the center of a tug-of-war battle between airlines in the Oneworld alliance, of which JAL currently is a member, and the SkyTeam alliance, which is trying to lure it away.
Defections of large carriers from one global alliance to another have been extremely rare. Winning over JAL has become a priority for Delta, which heads the SkyTeam alliance. The Oneworld alliance is led by AMR Corp.'s (AMR) American Airlines and British Airways PLC (BAY.LN). The two U.S. airlines have been shipping their top executives over to Tokyo weekly to sway JAL and government officials.
"There are talks and everyone is positive about it. The talks are progressing well," said a spokeswoman for Air France-KLM, declining to give more details. Air France-KLM is a leading member of SkyTeam. A spokeswoman for Delta last week said talks were continuing.
Dutch daily De Telegraaf Monday reported that Delta and Air France-KLM have reached an agreement on a capital injection for JAL, with the Franco-Dutch carrier contributing hundreds of millions of euros.
Delta is offering $500 million in equity plus other incentives for a package valued at about $1 billion. American and its partners, which include buyout firm TPG, are offering a $1.4 billion investment package.
JAL is expected to file for bankruptcy Tuesday after the Tokyo Stock Exchange closes. The carrier's major lenders have agreed to government efforts to restructure the airline.
JAL has been receiving official advice that a tie-up with Delta would be more advantageous, according to people familiar with the matter, on the grounds that Delta has a more robust trans-Pacific flight network and a stronger Asian network than American Airlines.
A decision isn't certain, however, and JAL isn't likely to make a choice until next month.
A SkyTeam spokeswoman said that SkyTeam is ready to welcome JAL into its alliance, saying a tie-up will create "the largest and most successful airline alliance affiliation for JAL." Discussions were continuing, she added.
She said that JAL's regional Asian network will be complementary to the networks of SkyTeam members Korean Air Co. (003490.SE) and China Southern Airlines Co. (1055.HK). "Most of JAL's most important partners today are SkyTeam member airlines," she said.
Oneworld said its offer to JAL was superior. "This Oneworld proposal is in the best interests of JAL and its employees and customers, and the government and taxpayers of Japan. It provides JAL the greatest long-term value at the lowest risk and brings stability and certainty to the airline at a time when it is most needed."
-By Maarten van Tartwijk; Dow Jones Newswires; +31-20-5715-200; maarten.vantartwijk@dowjones.com
THE WALL STREET JOURNAL
By Maarten van Tartwijk and Bart Koster
Of DOW JONES NEWSWIRES
AMSTERDAM (Dow Jones)--Talks between Delta Airlines Inc. (DAL) and Japan Airlines Corp. (9205.TO) to persuade the Japanese carrier to switch alliances are advancing, Air France-KLM (AF.FR) confirmed Monday.
The struggling Japanese carrier is at the center of a tug-of-war battle between airlines in the Oneworld alliance, of which JAL currently is a member, and the SkyTeam alliance, which is trying to lure it away.
Defections of large carriers from one global alliance to another have been extremely rare. Winning over JAL has become a priority for Delta, which heads the SkyTeam alliance. The Oneworld alliance is led by AMR Corp.'s (AMR) American Airlines and British Airways PLC (BAY.LN). The two U.S. airlines have been shipping their top executives over to Tokyo weekly to sway JAL and government officials.
"There are talks and everyone is positive about it. The talks are progressing well," said a spokeswoman for Air France-KLM, declining to give more details. Air France-KLM is a leading member of SkyTeam. A spokeswoman for Delta last week said talks were continuing.
Dutch daily De Telegraaf Monday reported that Delta and Air France-KLM have reached an agreement on a capital injection for JAL, with the Franco-Dutch carrier contributing hundreds of millions of euros.
Delta is offering $500 million in equity plus other incentives for a package valued at about $1 billion. American and its partners, which include buyout firm TPG, are offering a $1.4 billion investment package.
JAL is expected to file for bankruptcy Tuesday after the Tokyo Stock Exchange closes. The carrier's major lenders have agreed to government efforts to restructure the airline.
JAL has been receiving official advice that a tie-up with Delta would be more advantageous, according to people familiar with the matter, on the grounds that Delta has a more robust trans-Pacific flight network and a stronger Asian network than American Airlines.
A decision isn't certain, however, and JAL isn't likely to make a choice until next month.
A SkyTeam spokeswoman said that SkyTeam is ready to welcome JAL into its alliance, saying a tie-up will create "the largest and most successful airline alliance affiliation for JAL." Discussions were continuing, she added.
She said that JAL's regional Asian network will be complementary to the networks of SkyTeam members Korean Air Co. (003490.SE) and China Southern Airlines Co. (1055.HK). "Most of JAL's most important partners today are SkyTeam member airlines," she said.
Oneworld said its offer to JAL was superior. "This Oneworld proposal is in the best interests of JAL and its employees and customers, and the government and taxpayers of Japan. It provides JAL the greatest long-term value at the lowest risk and brings stability and certainty to the airline at a time when it is most needed."
-By Maarten van Tartwijk; Dow Jones Newswires; +31-20-5715-200; maarten.vantartwijk@dowjones.com
THE WALL STREET JOURNAL
