3RD LD: JAL sticks with American-led group, ends tie-up talks with Delta+

TOKYO, Feb. 9 Kyodo -
(EDS: ADDING COMMENT IN 7TH GRAF)
Japan Airlines Corp., which recently filed for bankruptcy protection, said
Tuesday it has decided to stay with the oneworld airline grouping led by
American Airlines Inc, ending its alliance talks with Delta Air Lines Inc.
The Japanese carrier apparently decided to strengthen its existing ties with
American Airlines to avoid the costs and risks that would be entailed in
defecting to the rival Delta-led SkyTeam alliance as it undergoes a state-led
restructuring process under a three-year plan.
To expand the JAL-American partnership, the two carriers are expected to apply
to the U.S. Department of Transportation later this week for antitrust immunity
under an ''open skies'' agreement recently inked between Japan and the United
States.
The agreement allows Japanese and U.S. airlines to go beyond conventional
code-sharing operations and coordinate pricing and flight routes between the
two countries.
Speculation had been rife that JAL would switch to the alliance led by Delta,
the world's biggest carrier, to boost its medium- to long-term competitive edge
through access to a greater number of Japan-U.S. routes.
The two U.S. airlines, for their part, had been courting the debt-ridden
Japanese carrier for months to tap into lucrative Asian routes.
''We believe they have made the right choice for JAL's many stakeholders, for
Japan's national interests and for consumers traveling between Japan and the
United States,'' American Airlines Chief Executive Officer Gerard Arpey said in
a statement.
Sources close to the matter said that JAL decided to maintain its ties with
American, the No. 2 U.S. carrier, after the launch of a new management team
headed by Chairman Kazuo Inamori earlier this month.
Inamori values the long-standing relations between JAL and American, and fears
that a tie-up with Delta could fail to secure antitrust immunity because of
their combined dominant market share on Japan-U.S. routes, the sources said.
American, a unit of AMR Corp., has said it is prepared to invest up to $1.4
billion in JAL, along with oneworld members and U.S. investment firm TPG Inc.
But JAL is unlikely to accept the financial package as it goes through a
rehabilitation process sponsored by a Japanese government-backed corporate
turnaround body.
The oneworld grouping also includes British Airways plc, Qantas Airways Ltd.
and Cathay Pacific Airways Ltd.
The latest decision by JAL will prompt Delta to review strategies to expand its
leading market share on lucrative trans-Pacific routes, aviation analysts said.
==Kyodo
2010-02-09 23:52:18