Delta Air Lines Inc (DAL) and its SkyTeam alliance partners said it has made an offer of $1 billion in aid to the ailing Japan Airlines Corp. (JALSF.PK,JALSY.PK) that includes $500 million in new capital, in an effort to woo the struggling airline from rival oneworld.
Delta, a part of a global airline alliance that includes Air France-KLM and Korean Air, said it would also provide the loss-making carrier $300 million revenue guarantee and $200 million in asset-backed financing, as well as $20 million computer-integration and other switching costs.
Earlier this week, media reports suggested that American Airlines, a subsidiary of AMR Corp. (AMR), is planning to join hands with private-equity firm TPG Inc. to pump in around $300 million into Japan Airlines, or JAL.
Edward Bastian, president, Delta told reporters in Tokyo, "We believe strongly enough in JAL and in its future to put our own capital at risk."
Shinagawa, Japan based JAL, already has ties with a number of SkyTeam members, including code-sharing agreements with Air France-KLM and Korean Air Co. JAL's links with oneworld partners also include extensive code sharing with American, notably through its Chicago hub. oneworld brings together some of the best and biggest names in the airline business - American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, LAN, Qantas and, since 1 April, Japan Airlines, Malév Hungarian Airlines and Royal Jordanian, plus some 20 affiliates.
Under code-share agreements, airlines can sell each other's tickets under their own name, allowing them to increase sales without having to bear the cost of operating a plane on the route.
JAL, Asia's biggest carrier by sales, has been incurring losses in the past few years and badly needs investment and government support for survival . The airline on November 13 said it swung to a loss of 131.2 billion yen or $1.46 billion for the six months ended Sept. 30 as the global economic downturn and swine flu fears triggered a severe slump in demand. The company also refrained from issuing annual forecasts due to uncertain business outlook.
In June, JAL secured 100 billion yen in emergency funding from a group of existing creditors after the Japanese government agreed to guarantee new loans. The airline is also planning large job cuts and major route reductions. The job reductions would be carried out in phases and concluded by March 2015, reports said.
Japan Air Lines provides service to Asia, Europe, Australia, New Zealand and North and South America, and serves numerous airports in the United States, including Cincinnati, with direct and code-sharing flights.
Separately, American Airlines said in a statement that American and its oneworld partners are confident that the total value proposition they offer JAL is superior in every way to any alternative.
American Airlines said it stands ready to make a substantial 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 around $100 million in revenue annually in future years. Further, the company believes that benefit can't be matched by another partner, and it would be in addition to the nearly $500 million in annual revenue that oneworld delivers to JAL.
An alliance with JAL would help both American and Delta gain the Japanese carrier's route network in Japan and China.
DAL is trading at $7.85, down $0.05 or 0.63%, on a volume of 0.68 million shares, while AMR is trading at $5.88, down $0.11 or 1.84%, on a volume of 0.94 million shares on the NYSE.
JALSY.PK is currently trading at $5.60, down $0.25 or 4.27% on the Electronic OTC Markets.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.