US carrier Delta Air Lines may invest up to 550 million dollars in cash-strapped Japan Airlines to make it the carrier's biggest shareholder, Japanese media reported Saturday. Delta has told JAL of its interest in investing up to 50 billion yen in the Japanese carrier, the Nikkei business daily and public broadcaster NHK said.
Reports emerged Friday that JAL, Asia's biggest airline, was reported to have entered "full-scale" talks over capital aid of tens of billions of yen from Delta. Such an investment would give the world's largest airline operator a stake of up to 11 percent in JAL, which is undergoing a government-supervised reorganisation, the Nikkei said.
But the newspaper also said a tie-up with Delta would be difficult because JAL belongs to the oneworld global airline alliance, for which Delta's rival American Airlines Inc is the North American member. JAL was also sounding out Air France-KLM Group, Europe's top airline, on expanding its alliance in deals that could dramatically alter the makeup of the global airline industry, Japan's Kyodo News has reported.
Delta and Air France-KLM are both part of SkyTeam, another global airline alliance. JAL has secured loans from state-backed lenders and is due to present a management improvement plan to the government later this month. Japan's transport ministry appears to support an investment by Delta.
"If JAL ties up with Delta and expands code-sharing, that would lead to higher efficiency in its international services," a high-ranking ministry official said, according to the Nikkei. The Japanese airline is slashing its flight services as it braces for a second straight year in the red, hit by the global economic downturn and swine flu fears.
JAL lost more than one billion dollars in the April-June quarter and has announced more than 11,000 job cuts since 2005. Kyodo News reported last month that it was considering cutting about 5,000 employees, or 10 percent of its group workforce, by March 2012. Delta is also slashing flight capacity and reviewing staff needs in the face of the global recession.
Comments
Comments are closed.