ID :
93127
Fri, 12/04/2009 - 09:33
Auther :
Shortlink :
https://www.oananews.org//node/93127
The shortlink copeid
American team to invest $1.1 bil. in JAL as Delta eyes venture capital+
TOKYO, Dec. 3 Kyodo - American Airlines Inc. said Thursday it is prepared to invest up to $1.1 billion in struggling Japan Airlines Corp. together with its global oneworld alliance members and private-equity firm TPG Inc. as rival Delta Air Lines Inc. eyes sweetening its own proposal with additional third-party funds.
Officials of the world's two biggest airlines arrived in Tokyo and vigorously
made their case for a deeper partnership with JAL as they seek access to
lucrative Asian routes held by the Japanese carrier now seeking a turnaround
under state supervision.
Separately, sources close to the matter said rival All Nippon Airways Co. is
eyeing integrating its Japan-U.S. operations with United Airline Inc. and
Continental Airlines Inc., which all belong to the same Star Alliance in view
of an anticipated conclusion of an open skies accord between the two countries.
American Airlines, a unit of AMR Corp., said it and oneworld partners will team
up with TPG, a major U.S. investment firm with expertise in the airline
industry, to provide incremental financial support eventually totaling over
$1.8 billion to block JAL's defection to rival grouping SkyTeam.
Delta President Edward Bastian countered that the U.S. carrier would also be
willing to seek additional venture capital funds to beef up its $1.02 billion
financial package with SkyTeam, which includes a direct investment of $500
million.
''We could go find third-party financing,'' Bastian said in an interview with
Kyodo News in Tokyo. ''If the government was seeking our support in doing that,
we could raise that same type of money.''
Bastian did not disclose the amount of third-party funds or who the additional
investors would be, saying Delta has not received a specific request from the
government. But he repeated his earlier intention to provide financial support
to JAL even if the company undergoes legal liquidation.
''Financial investors that don't have a vested stake in the airline industry
are seeking an opportunity to (eventually) buy the company,'' he said. ''Our
interest is to work with the company in the future and grow together.''
Meanwhile, the American Airlines team said it anticipates a net present value
of $700 million over a 10-year period if JAL and the U.S. carrier can receive
antitrust immunity, assuming an open skies accord is reached between Japan and
the United States as early as before the year-end.
''A healthy and stronger JAL is good for Japan, its economy and its traveling
public,'' Tom Horton, chief financial officer of American Airlines, said at a
press conference in Tokyo. ''And oneworld, American and TPG are the partners to
help make this happen.''
Horton said American Airlines has already presented its proposal to JAL and the
Japanese government.
''Our investment and our proposal will be part of an overall restructuring plan
led by the government, which will restore Japan Airlines to financial health,''
Horton said.
Japan and the United States are expected to carry out a final round of talks on
the open skies accord later this month. An open skies deal gives carriers more
freedom to open routes and choose the number of flights between the two
countries.
JAL, which is headed for its fourth annual loss in five years, is currently
awaiting a decision, as early as in January, for broad financial support from a
government-backed corporate turnaround body -- the Enterprise Turnaround
Initiative Corp. of Japan.
The airline has said it plans to wrap up its talks with foreign carriers before
the year-end, while Delta and American Airlines are hoping to apply with JAL
for antitrust immunity as soon as the open skies accord is reached.
A JAL-Delta partnership would control over 60 percent of the Japan-U.S.
aviation market, raising heated arguments over whether antitrust immunity would
be granted.
While the costs of transferring to a rival alliance would also be high, Delta's
Bastian claimed their partnership would be the best to counter Star Alliance
with competition expected to heat up with ANA, United and Continental also
preparing to apply for antitrust immunity.
''Make the best choice, not the easy choice,'' Bastian said.
==Kyodo
2009-12-03 23:15:09
Officials of the world's two biggest airlines arrived in Tokyo and vigorously
made their case for a deeper partnership with JAL as they seek access to
lucrative Asian routes held by the Japanese carrier now seeking a turnaround
under state supervision.
Separately, sources close to the matter said rival All Nippon Airways Co. is
eyeing integrating its Japan-U.S. operations with United Airline Inc. and
Continental Airlines Inc., which all belong to the same Star Alliance in view
of an anticipated conclusion of an open skies accord between the two countries.
American Airlines, a unit of AMR Corp., said it and oneworld partners will team
up with TPG, a major U.S. investment firm with expertise in the airline
industry, to provide incremental financial support eventually totaling over
$1.8 billion to block JAL's defection to rival grouping SkyTeam.
Delta President Edward Bastian countered that the U.S. carrier would also be
willing to seek additional venture capital funds to beef up its $1.02 billion
financial package with SkyTeam, which includes a direct investment of $500
million.
''We could go find third-party financing,'' Bastian said in an interview with
Kyodo News in Tokyo. ''If the government was seeking our support in doing that,
we could raise that same type of money.''
Bastian did not disclose the amount of third-party funds or who the additional
investors would be, saying Delta has not received a specific request from the
government. But he repeated his earlier intention to provide financial support
to JAL even if the company undergoes legal liquidation.
''Financial investors that don't have a vested stake in the airline industry
are seeking an opportunity to (eventually) buy the company,'' he said. ''Our
interest is to work with the company in the future and grow together.''
Meanwhile, the American Airlines team said it anticipates a net present value
of $700 million over a 10-year period if JAL and the U.S. carrier can receive
antitrust immunity, assuming an open skies accord is reached between Japan and
the United States as early as before the year-end.
''A healthy and stronger JAL is good for Japan, its economy and its traveling
public,'' Tom Horton, chief financial officer of American Airlines, said at a
press conference in Tokyo. ''And oneworld, American and TPG are the partners to
help make this happen.''
Horton said American Airlines has already presented its proposal to JAL and the
Japanese government.
''Our investment and our proposal will be part of an overall restructuring plan
led by the government, which will restore Japan Airlines to financial health,''
Horton said.
Japan and the United States are expected to carry out a final round of talks on
the open skies accord later this month. An open skies deal gives carriers more
freedom to open routes and choose the number of flights between the two
countries.
JAL, which is headed for its fourth annual loss in five years, is currently
awaiting a decision, as early as in January, for broad financial support from a
government-backed corporate turnaround body -- the Enterprise Turnaround
Initiative Corp. of Japan.
The airline has said it plans to wrap up its talks with foreign carriers before
the year-end, while Delta and American Airlines are hoping to apply with JAL
for antitrust immunity as soon as the open skies accord is reached.
A JAL-Delta partnership would control over 60 percent of the Japan-U.S.
aviation market, raising heated arguments over whether antitrust immunity would
be granted.
While the costs of transferring to a rival alliance would also be high, Delta's
Bastian claimed their partnership would be the best to counter Star Alliance
with competition expected to heat up with ANA, United and Continental also
preparing to apply for antitrust immunity.
''Make the best choice, not the easy choice,'' Bastian said.
==Kyodo
2009-12-03 23:15:09
