Delta meets Japanese gov't to make case for capital ties with JAL+

TOKYO, Dec. 9 Kyodo -
Executives of Delta Air Lines Inc. met Wednesday with Japanese transport
minister Seiji Maehara, with the world's biggest carrier trumpeting the
long-term benefits of forming capital ties between Delta and struggling Japan
Airlines Corp. to help it turn around.

The U.S. carrier has offered JAL a $1.02 billion financial package with global
SkyTeam alliance members, including a $500 million investment, to woo the
Japanese airline to switch from the rival oneworld alliance with American
Airlines Inc., a unit of AMR Corp.
''In order for any restructuring to be successful, a company has to have
top-line growth, market expansion and more passengers,'' Delta Chief Executive
Officer Richard Anderson told reporters in Tokyo following a meeting with
Maehara.
''We give the opportunity to make certain that JAL holds its rightful place as
the leading airline in Asia,'' he added.
Japan's top airline, headed for its fourth annual loss in five years, is
currently seeking broad financial support from a government-backed corporate
turnaround body. But Anderson indicated that Delta is willing to back JAL even
if it undergoes bankruptcy proceedings.
''We are committed to our relationship for many, many decades. Our partnerships
are through thick and thin,'' he said.
At the outset of the meeting, Maehara said he was certain that JAL would be
able to reconstruct itself, but added that the government has a ''strong
interest'' in developments related to capital tie-up talks between JAL and
foreign carriers, especially at a time when Japan and the United States are
drawing close to concluding an open skies accord.
''Since it is a private company, it is up to JAL to decide which global airline
company to partner with,'' Maehara said. ''But as JAL will use an entity using
taxpayers' money (to turn itself around), we will watch closely what JAL will
choose to do.''
Maehara is also expected to meet next week with executives of American
Airlines, which has also said it is prepared to invest up to $1.1 billion in
JAL, together with its oneworld partners and private equity firm TPG Inc. to
prevent JAL's defection.
Theo Panagiotoulias, American Airlines vice president in charge of Asia and the
Pacific, said Gerard Arpey, chairman and CEO of the second-largest U.S.
carrier, will visit Japan next week for talks with Maehara to explain the
oneworld alliance's plan to turn JAL around.
Meeting reporters after Anderson held talks with Maehara, Panagiotoulias said
Arpry could not visit Japan this weak because the oneworld alliance is likely
to expand its membership.
Arpey will present Maehara with a support package that will bring great
benefits to the Japanese people and JAL, including an expanded oneworld
grouping, Panagiotoulias added.
The world's two biggest airlines have raised their stakes for JAL as they seek
to tap into the lucrative Asian routes operated by the Japanese carrier.
''Our focus is Tokyo and will remain Tokyo forever because it's really the
center of where everything goes on in Asia from an aviation standpoint,''
Delta's Anderson said.
==Kyodo
2009-12-09 22:21:49