Struggling Japan Airlines Corp has entered talks with Air France-KLM over a capital tie-up, a newspaper said yesterday.
Asia’s biggest airline hopes to expand its businesses in Europe via the capital alliance with Air France-KLM, said the Yomiuri Shimbun, Japan’s top-selling daily.
The report cited no sources and officials at the Japanese airline, known as JAL, could not be reached for comment yesterday.
PHOTO: AFP
JAL said on Friday it was considering various tie-ups with a wide variety of potential partners but nothing had been decided.
JAL is in the midst of a major restructuring as the airline incurred its biggest-ever quarterly net loss of ¥99 billion (US$1 billion) in the three months to June.
The Japanese company has forecast a net loss of ¥63 billion for the current fiscal year to March and plans to cut the number of flights and slash costs by ¥53 billion during the current fiscal year and another ¥100 billion in the next fiscal year.
Apart from Air France-KLM, JAL is also seeking a bigger capital injection from Delta Air Lines, the Yomiuri said.
Delta — the world’s biggest airline operator — is considering making a cash infusion of a couple hundred million dollars to aid JAL, a person briefed on the talks said on Friday.
In exchange for the infusion, the person said Delta could get a stake in JAL, an expanded presence in Japan and coveted access to the closest airport to the Tokyo business center.
The Yomiuri reported that Delta could become a top shareholder of JAL.
But the talks between JAL and Delta were in their preliminary stage, and it was unclear what form a partnership between the two airlines might take, said the person, who asked not to be identified by name because of the sensitivity of the discussions.
Delta subsidiary Northwest Airlines has a history with Japan Airlines, having handled flight operations for the Japanese carrier in the early 1950s, JAL’s Web site showed.
A Delta spokesman declined to comment.
JAL spokesman Satoru Tanaka said the airline was considering various tie-ups with a wide variety of potential partners, but nothing had been decided.
Japan’s Nikkei Shimbun quoted a senior JAL official yesterday as saying the tie-up with Delta would be difficult because of the Japanese airline’s alliance with American Airlines.
JAL has a codeshare agreement with American Airlines as part of its participation in the oneworld alliance. Delta’s SkyTeam alliance currently doesn’t have a Japanese partner.
Instead of Delta, JAL may seek a capital injection from American Airlines, the Nikkei said.
Among US carriers, Atlanta-based Delta has a relatively large Japan presence by virtue of its acquisition last year of Northwest, but its market share there is still dwarfed by that of Japanese carriers.
In the Tokyo market, Delta operates from Narita Airport, the main international airport.
Delta has not been allowed to serve Haneda Airport, a mostly domestic airport that is much closer to the center of Tokyo.
The US and Japanese governments have been in talks about air service between the countries, though it is unclear how those talks will turn out.
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