Oneworld airlines up offer to keep JAL
By Tomoko A. Hosaka |
January 13, 2010, Wednesday
|
Print Edition
Print Edition
AMERICAN Airlines and its alliance partners have boosted their offer of support to Japan Airlines to keep the money-losing airline with the Oneworld family.
American, British Airways, Qantas Airways and Cathay Pacific Airways said yesterday they are ready to inject US$1.4 billion cash into Japan's flagship carrier, up from US$1.1 billion. In addition, they will guarantee US$2billion in revenue over the next three years if JAL stays in the Oneworld alliance.
The announcements by JAL's Oneworld partners came as the Japanese government finalizes the details of a turnaround plan for the country's flagship carrier, which is deeply in debt and suffering heavy losses. The plan will include a bankruptcy filing, cutting about a third of its work force and canceling almost US$4 billion in debt, according to media reports.
Officials from the transport ministry and the banks refused to comment on the reports.
Earlier yesterday, Transport Minister Seiji Maehara held talks with the heads of JAL's three main banks. Public broadcaster NHK said Maehara explained JAL's bankruptcy plan to the banks.
During the meeting, the banks - Mizuho Corporate Bank Ltd, the Bank of Tokyo-Mitsubishi UFJ Ltd, and Sumitomo Mitsui Banking Corp - approved the airline's bankruptcy, Kyodo News agency reported.
The news didn't help JAL shares, which plummeted by 45 percent yesterday - the maximum decline allowed - or 30 yen (33 US cents) to 37 yen.
JAL is still Asia's biggest airline and its access to the region is a prized asset for other airlines. Executives from Oneworld alliance members American, BA, Qantas and Cathay Pacific said their plan would help the Japanese carrier through its recovery.
Rival Delta Air Lines and its SkyTeam partners have offered US$1 billion, including US$500 million in cash. However, a government turnaround body is set to decline all cash offers, as it fears giving foreign carriers a stake in JAL would complicate the restructuring, according to media reports.
American, British Airways, Qantas Airways and Cathay Pacific Airways said yesterday they are ready to inject US$1.4 billion cash into Japan's flagship carrier, up from US$1.1 billion. In addition, they will guarantee US$2billion in revenue over the next three years if JAL stays in the Oneworld alliance.
The announcements by JAL's Oneworld partners came as the Japanese government finalizes the details of a turnaround plan for the country's flagship carrier, which is deeply in debt and suffering heavy losses. The plan will include a bankruptcy filing, cutting about a third of its work force and canceling almost US$4 billion in debt, according to media reports.
Officials from the transport ministry and the banks refused to comment on the reports.
Earlier yesterday, Transport Minister Seiji Maehara held talks with the heads of JAL's three main banks. Public broadcaster NHK said Maehara explained JAL's bankruptcy plan to the banks.
During the meeting, the banks - Mizuho Corporate Bank Ltd, the Bank of Tokyo-Mitsubishi UFJ Ltd, and Sumitomo Mitsui Banking Corp - approved the airline's bankruptcy, Kyodo News agency reported.
The news didn't help JAL shares, which plummeted by 45 percent yesterday - the maximum decline allowed - or 30 yen (33 US cents) to 37 yen.
JAL is still Asia's biggest airline and its access to the region is a prized asset for other airlines. Executives from Oneworld alliance members American, BA, Qantas and Cathay Pacific said their plan would help the Japanese carrier through its recovery.
Rival Delta Air Lines and its SkyTeam partners have offered US$1 billion, including US$500 million in cash. However, a government turnaround body is set to decline all cash offers, as it fears giving foreign carriers a stake in JAL would complicate the restructuring, according to media reports.
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