By Kiyotaka Matsuda Feb. 9 (Bloomberg) — AMR Corp.’s American Airlines will deepen ties to Japan Airlines Corp. on routes across the Pacific after Asia’s largest carrier by sales rebuffed an alliance offer from Delta Air Lines Inc. American and Japan Air will seek antitrust immunity to operate U.S.-Japan flights through a venture as early as this weekend, Daiji Nagai, JAL’s vice president of corporate planning, told reporters today in Tokyo. American’s offer to buy a stake in JAL will be declined, he said. New JAL Chairman Kazuo Inamori chose to stay in American’s Oneworld airline group because of existing ties and concern about winning regulatory approval for a Delta tie-up, two people familiar with the matter said. Delta and American, the world’s two biggest airlines, vied for access to JAL’s Asian network. American’s win “appears to have been accomplished at far less cost in the form of capital infusions than many expected,” said Douglas Runte , managing partner at Piper Jaffray & Co. in New York. He doesn’t rate Fort Worth, Texas-based AMR. Japan Air’s decision ends a struggle that began last year between American and Delta, which sought to entice the Tokyo- based carrier to switch to the SkyTeam airline alliance. Japan Air filed for bankruptcy protection last month. “It’s the right choice by Japan Air,” said Makoto Murayama , a Nomura Securities Co. analyst, in Tokyo. “The continuation of the partnership with American also means there will still be competition among the three airline alliances at Tokyo’s Narita airport.” AMR rose 37 cents, or 5.1 percent, to $7.69 at 9:32 a.m. in New York Stock Exchange composite trading , while Atlanta-based Delta gained 41 cents, or 3.6 percent, to $11.66. Added Revenue JAL will probably generate $2 billion in revenue over three years from its membership of Oneworld, AMR reiterated today. That includes $1.5 billion from ongoing ties and an additional $500 million from greater cooperation British Airways Plc , American last month. AMR “remains confident” that the U.S. will approve the antitrust immunity application, Chief Executive Officer Gerard Arpey said in a statement today. Japan and the U.S. reached an initial “open skies” deal last year that would remove government restrictions on flights between the two countries. All Nippon Airways Co. , Japan’s No. 2 carrier, has already requested antitrust immunity to extend cooperation with Star Alliance partners United Airlines and Continental Airlines Inc. on Japan-U.S. flights. The U.S. and Japan air-travel market is about evenly divided between Delta’s SkyTeam, Oneworld and Star. Delta Proposal Delta previously said that a tie-up with JAL would give the two carriers 58 percent of Japan-U.S. services including flights from beach locations such as Hawaii. American has said its share would shrink to 6 percent without JAL. American and private-equity firm TPG offered to invest as much as $1.4 billion in JAL. Delta and its partners in SkyTeam prepared a $1 billion package including financing in a bid to lure JAL from Oneworld. “Delta remains committed to providing a leading option for travel across the Pacific,” the carrier said in a statement. JAL has started on a 900 billion yen ($10 billion) state- backed turnaround after seeking court protection following three losses in four years. Inamori, Japan’s 28th richest man according to Forbes and the founder of electronics company Kyocera Corp. , will oversee a restructuring that will include axing 31 routes and almost a third of JAL’s staff. To contact the reporter on this story: Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net
Originally posted here:
American to Boost Ties With Japan Air as Asia’s Top Carrier Rebuffs Delta
