Minister expected American to make more positive pitch for Japan Air

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TOKYO, Dec. 17 Kyodo -
Transport minister Seiji Maehara said Thursday he expected a more positive
explanation from the executives of American Airlines Inc. on the merits of the
U.S. carrier forging capital ties with cash-strapped Japan Airlines Corp. after
their meeting a day earlier.
''American promoted itself to a certain extent, but it spent most of the time
explaining why JAL cannot partner with Delta,'' Maehara told reporters after
meeting with American's Chief Executive Officer Gerald Arpey. ''To be honest, I
wish they had given us a slightly more forward-looking explanation.''
The government will carry out a closer analysis on the feasibility of a
partnership between JAL and rival Delta Air Lines Inc. in view of whether the
two companies would be granted antitrust immunity, he also said at a press
conference.
American has offered to invest up to $1.1 billion with global oneworld alliance
members and U.S. private-equity firm TPG to block JAL's defection to the rival
SkyTeam grouping led by Delta.
American executives have argued vehemently that Delta and JAL would not be
granted antitrust immunity since they would hold a share of over 60 percent in
the Japan-U.S. market while Delta has said the partnership would not face any
regulatory hurdles.
The tug-of-war over JAL to tap into lucrative Asian routes has hit a new level
of intensity after Japan and the United States just days ago struck a landmark
''open skies'' accord to liberalize air traffic, which will pave the way for
airline companies in the two countries to work together more closely in
scheduling and pricing.
In a related move, Delta's Chief Executive Officer Richard Anderson said
Wednesday in New York that the largest U.S. airline is ready to team up with a
third party, such as an investment fund, to increase its proposed investment in
JAL.
''We are prepared to work with constituencies if there is a need or desire to
use our agreement and our investment to increase participation by others,''
Anderson told reporters, though adding that whether to bring in a third party
in the investment scheme is up to JAL, its creditors and a Japanese
government-backed turnaround body that is helping the cash-strapped carrier.
Japan's largest airline, headed for its fourth annual loss in five years, is
seeking financial support from the corporate turnaround body, which can raise
up to 1.6 trillion yen in government-guaranteed funds.
Maehara said, ''Since JAL is seeking aid from a scheme built on the use of
taxpayers' money, which partner it chooses will be major point that will make a
huge difference to how the money is utilized.''
==Kyodo
2009-12-17 22:58:40