JAL Mileage Bank - JAL bought by Delta ?

NHK News just announced that Delta will become the major shareholder of JAL

NHK News just announced that Delta will become the major shareholder of JAL

WHAT!?!?!?

From NHK website....

"Financially struggling Japan Airlines has entered negotiations to form a capital tie-up with US carrier Delta Airlines in order to receive large-scale capital assistance, NHK has learned."

This doesn't make any sense. DL is in worse shape than JL.

Now service standards can be harmonized ! :D
(to the DL level of course!)

http://online.wsj.com/article/BT-CO-20090911-703852.html

http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUST30087420090911

JAL declined to comment

NHK video report in Japanese

http://www3.nhk.or.jp/news/t10015451101000.html

If true this is one of the boldest/most interesting moves made by any airline in many years.

They're probably sensing that the DPJ isn't going to give them any more handouts like the LDP has for quite some time.

This may be really bad news. I don't know about you, but Delta is pretty bad. Haven't flown with them internationally but I can't say I'd want to.

UA to DL status match could entitle me to JL lounges. Exciting！

UPDATE: Delta Air In Early Talks To Buy Stake In JAL - Source (http://online.wsj.com/article/BT-CO-20090911-705031.html)

Delta Air Lines Inc. (DAL) is in talks to buy a stake in Japan Airlines Corp. in a move that will provide the ailing Japanese carrier with much-needed funds and give the U.S. airline, the world's biggest by revenue, a partner in Japan to build on its established presence in the country, according to a person familiar with the situation.

Speaking on condition of anonymity, the person said the talks between the companies are at a preliminary stage.

Any deal would help boost Delta's presence in the Asia-Pacific region and fill a gap in the global SkyTeam alliance headed by the U.S. airline. JAL is currently a member of rival Oneworld grouping headed by American Airlines and British Airways.

If DL should ever get enough control over JL to do to JL what they did to NW, I'm outta here...

It seems that, with DL (maybe) buying up JAL, they are entering into the domain of "World Domination!" They've obviously made some sort of 'pact' (read JV) with AF ... allowing the latter to buy up all the European airlines, thus dividing the world into two, allied empires. :eek: What shall we call it ... the "Franco-American Axis?"

-- Henry

seriously..if DL gets control over JL, it would mean JL is going to drop out of being a high quality airline..and bunch of people dropping out of their program, which will make their balance book even worse I guess

It seems that, with DL (maybe) buying up JAL, they are entering into the domain of "World Domination!" They've obviously made some sort of 'pact' (read JV) with AF ... allowing the latter to buy up all the European airlines, thus dividing the world into two, allied empires. :eek: What shall we call it ... the "Franco-American Axis?"

-- Henry

doubt it will be Franco...more like Germanic, since LH just took over OS and more coming that way

If the logic of the management team of Flying Blue is anything to go by, then folks dropping out of the FFP (and accrued mileage banks being relinquished) is actually good for the balance books - at least, it is according to trading standards set in the Euorpean Union.

-- H

doubt it will be Franco...more like Germanic, since LH just took over OS and more coming that way

Possibly! There's a three-way battle going on for control in Europe, with the three alliances each having their protagonists: BA (for OW), LH (for *A) and AFKL (for ST). I think there's a lot of cash being spent: AF recently bought a significant share in AZ and they may still have (half) an eye on OK, EI and others; BA have been talking about 'merging' with IB for a while, now, and LH seem to be buying up everything they can (having been pipped at the post by AF over AZ). And then there's the LCCs!

-- Henry

If the logic of the management team of Flying Blue is anything to go by, then folks dropping out of the FFP (and accrued mileage banks being relinquished) is actually good for the balance books - at least, it is according to trading standards set in the Euorpean Union.

-- H

it can be good if people ARE willing to take AF and its subsidaries, even if less people are redeeming the tickets
but I doubt there would be more people taking AF, some may rather use a more long route to have a better service

I've got a lot of miles tied up with JAL, so maybe it's time to take a close look at what to do with them. I got a watch from their inflight sales by changing some miles to coupons; hope they come up with some new good selections soon!

JAL has denied the NHK report.

http://www.bloomberg.com/apps/news?pid=20601101&sid=a40x8ZBXN_MA

While JAL is suffering like most other airliners, I do not think the national airline of Japan would be taken over by Delta. There is a lot of pride in that name, which is why most Japanese still see ANA as second to JAL.

It's interesting that JAL FA, pilots, and even CEO have hit the street to promote their company by handling out pamphlets, flyers, and other goods.

http://mdn.mainichi.jp/mdnnews/news/20090910p2a00m0na007000c.html

Japanese aviation laws limit foreign capital to 1/3 for each airline. So there will be no immediate take-over.

Big difference between taking a stake and taking control. There would be insurmountable statutory and cultural obstacles to a foreign interest taking control of the Japanese flag carrier. That said, if DL and JAL develop a coordinate relationship, NRT would become even more of an anti-competitive fortress.

JAL has denied the NHK report.

http://www.bloomberg.com/apps/news?pid=20601101&sid=a40x8ZBXN_MA

While JAL is suffering like most other airliners, I do not think the national airline of Japan would be taken over by Delta. There is a lot of pride in that name, which is why most Japanese still see ANA as second to JAL.

It's interesting that JAL FA, pilots, and even CEO have hit the street to promote their company by handling out pamphlets, flyers, and other goods.

http://mdn.mainichi.jp/mdnnews/news/20090910p2a00m0na007000c.html

Of course everyone denies it until the deal goes through. Note, JAL restructuring is advised by the Government.

more rampant speculation is available here:

http://www.flyertalk.com/forum/oneworld/993964-delta-buying-into-jal-what-will-do-oneworld.html

More scary quote from JAL


From Kyodo News (http://home.kyodo.co.jp/modules/fstStory/index.php?storyid=459579)

''The merits of belonging to Oneworld are small,'' a senior JAL official said, suggesting the airline may leave the grouping once it inks the deal with Delta.

didn't want to blindly assume earlier but two sources indicate that this may mean a rival offer coming from oneworld partners:

http://online.wsj.com/article/SB125266796537202823.html
http://www.upi.com/Business_News/2009/09/11/Delta-talking-deal-with-Japan-Airlines/UPI-52501252705838/

as someone who flies american and then incidentally (or on award travel) jal, I would actually prefer that neither deal materializes.

"'The merits of belonging to Oneworld are small,'' a senior JAL official said,"I guess I would ask, "compared to what?" Compared to being unaligned? Or do they think SkyTeam will serve them better?

I guess I would ask, "compared to what?" Compared to being unaligned? Or do they think SkyTeam will serve them better?

Compared with being aligned with Delta/Northwest, which has more transpacific flights than AA. That's what's been speculated in local media as a factor why Japanese transport ministry officials favor Delta over AA. JL stands to benefit more from a partner with a bigger network if and when the U.S. and Japan sign an open skies agreement, the media say.

The Nihon Keizai Shimbun business daily also said it was Delta that came forward in late August to propose that it buy a stake in JL, while no such overture has been made by AA. The government officials are inclined to think it would be easier to secure an investment by DL than AA because of DL's proactive investment stand.

I guess I would ask, "compared to what?" Compared to being unaligned? Or do they think SkyTeam will serve them better?

What has changed since JAL joined Oneworld? Not sure how many extra passengers they got because of OW membership. *A benefits ANA tremendously due to its relatively weak international network. But JAL has a more extensive international network and they codeshare with AA, BA, CX, etc even before joining OW...

Just to shed a light on the news,
in view of Japanese aviation law, DL can only buy a stake in JL, but can not buy the ownership of the company.

NHK News just announced that Delta will become the major shareholder of JAL

NW owned a stake in CO for years and years. You would never know it beyond some reciprocal upgrades and code sharing. In fact NW still had a golden share in CO up until the DL takeover. That golden share gave NW contractual commitments to cooperation on things and kept CO from joining other alliances.

I don't know what DL is thinking. They already gutted the Asia based FF program making many people wonder about the commitment to the region.

Stop putting JAL on a pedestal. It sounds foolish to do so because the carrier has fallen behind it's Asian an North American peers in many respects, not the least of which is spending large sums to install a Business Class product inferior to Delta's lie flat seating. JAL could well refocus itself on providing a safe, high quality experience again under Delta's tutelage.

Stop putting JAL on a pedestal. It sounds foolish to do so because the carrier has fallen behind it's Asian an North American peers in many respects, not the least of which is spending large sums to install a Business Class product inferior to Delta's lie flat seating. JAL could well refocus itself on providing a safe, high quality experience again under Delta's tutelage.

Wow.

DL is supposedly reconsidering its new lie flat seating. Besides, it's only available on limited LHR routes so far. JAL has had lie flat for some time, plus an F product DL doesn't offer.

Unless you've analyzed their business plan, is this really the source of JAL's woes?

DL is supposedly reconsidering its new lie flat seating. Besides, it's only available on limited LHR routes so far.

There are 2 DL Lie flat offerings....777LR angled lie flats (soon to be expanded to 777ER a/c in 2010) -- these are much loved, and on long haul routes (e.g. LAX-SYD, ATL-JNB, previously ATL-BOM)...and the 764ER (which are the a/c being used into LHR), and the ones having mixed reviews...mainly due to issues with the tray tables.

The AP is reporting that AA is also in talks with JL.

http://news.yahoo.com/s/ap/20090912/ap_on_bi_ge/as_japan_airlines_air_france_klm_delta_3

I think it seems more likely for a JL/DL tie up, but AA and OW probably fight this one out.

The AP is reporting that AA is also in talks with JL.

http://news.yahoo.com/s/ap/20090912/ap_on_bi_ge/as_japan_airlines_air_france_klm_delta_3

I think it seems more likely for a JL/DL tie up, but AA and OW probably fight this one out.

Which one you guys actually prefer?

Well, considering DL's overall products and quality issues, I would even not dare to say so.
JAL could well refocus itself on providing a safe, high quality experience again under Delta's tutelage.

An investment in JL of the magnitude being quoted in the media -- whether from DL or AA -- is going to neither rescue JAL nor turn them into a US-clone carrier. For one, a controlling stake isn't possible given Japanese ownership laws and as their highly restrictive bilateral arrangements, which restrict many benefits only to Japanese flag carriers (these two issues are the biggest inhibitor to international aviation consolidation outside Europe).

Minority investments likely mean little to no real change. Surely Air China hasn't become anything like Cathay Pacific or vice versa, and Singapore has long been unhappy with the lack of influence from its 49% stake in Virgin Atlantic (and the two make strategic decisions often not in the other's best interest).

For one, a controlling stake isn't possible given Japanese ownership laws and as their highly restrictive bilateral arrangements, which restrict many benefits only to Japanese flag carriers (these two issues are the biggest inhibitor to international aviation consolidation outside Europe).

Japanese analysts view the US bilateral as more restrictive on Japan than on the US. Just look at the myriad traffic rights that NW and UA have out of NRT, and what does Japan get in return? JFK-GRU on JL... hardly balanced. Not to say that there aren't restrictions on US carriers, but the restrictions run both ways.

Minority investments likely mean little to no real change. Surely Air China hasn't become anything like Cathay Pacific or vice versa, and Singapore has long been unhappy with the lack of influence from its 49% stake in Virgin Atlantic (and the two make strategic decisions often not in the other's best interest).

Your second sentence is correct, but this looks like it could be a very different deal than a simple financial investment. An AP report on Saturday said:

Delta -- the world's biggest airline operator -- is considering making a cash infusion of a couple hundred million dollars to aid JAL, according to a person briefed on the talks 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. Delta could become a top shareholder of JAL.

And then on Sunday:

American would like to form a joint business venture with JAL, in which the two carriers would seek antitrust immunity to work closely in setting schedules and prices for service around the world, according to the person, who spoke Saturday on condition of anonymity because of the sensitive nature of the talks.

Regardless of what sort of deal ends up inked, no airline is going to sink money into a financial and operational basket-case like JAL unless they get some benefits from its strategic position as Japan's #1 carrier.

A JL/AA deal make makes much more sense, liking it to the UA/LH setup ( and I understand LH does own some UA shares ). I am not sure if an investment it needed for such a deal. And it would remain a OneWorld matter.
A big buy-in by DL to me seems highly unlikely. First of all let's consider Japan's business laws. Then let's consider the unlikely compatibility between a Japanese company and the guys from Atlanta. And please do not misunderstand me on this. There is a huge cultural difference between any and I mean any country outside of this Island country and Japan.
JL does have some JVs, namely the codeshare flights with AF, which seem to work quite well, without investments. That again would favor the JL/AA linkup.
Additionally, I cannot see what advantage DL or JL would get out of this. Japanese people tend to fly Japanese flag carriers. Normal US pax prefer U.S. carriers, although some business fliers prefer Japanese/Asian carriers for their superior service amongst other criteria. Japanese carriers fly to the destinations that Japanese travelers prefer as holiday or business destinations ( HNL/SFO/LAX/SFO/JFK ). IAD seems to be a political destination. SEA and ORD ? Maybe a codeshare deal or a Boeing thing. A DL investment would not change anything. And bringing in Japanese destinations? I would venture that most Japanese domestic destinations are completely irrelevant for International connections except to a handful of pax. Who really needs to go to Sapporo, Naha, Sendai or the likes? And if necessary, there are options today to do that, although I do disagree with the one poster who said that domestic travel options other than flying are plentiful and cheap in Japan. Nothing is cheap in Japan! Additional U.S. destination for Japanese travelers? No need, otherwise NH/JL would have applied for routes to DFW/IAH/MIA or elsewhere a long time ago. I never heard of any route being denied to them, once applied for. I think supply and demand from/to Japan is quite saturated. On my flights to and from the U.S. I see mostly Japanese on Japanese airlines and U.S. pax on U.S. airlines. And trust me I fly those routes a lot. And I have done it for 45 plus years.
If it would be a NW investment, I would think a bit different. They had a least some name recognition in Japan and Asia. But an unknown like DL? Highly unlikely.
I can see a cooperation, but an investment in order to take over some control? Sure, JAL could use an investment. But who would invest in a company without getting a tangible asset out of it. How would the shareholders react?
The incoming Government, which still has some say about what JL does, is not so keen about the relationship with the U.S., but is looking more to their Asian neighbors as their priority. Let's see, how this plays out.
But, I have been wrong before. I thought a NW/CO deal would make sense, not a NW/DL deal. So, what do I know? Obviously, not much. As usual, just my 2 cents.

Please keep posting news on this. Interesting developments and also affects me personally as I have JAL trans-Pacific flights planned.

I cannot see what advantage DL or JL would get out of this.

It's obvious what JL gets out of this: it doesn't go bankrupt. DL's benefits are not as obvious. Humor me, though:

DL could ditch the entire NW NRT-Asia route network and code-share JL flights instead. This is a radical change but it would make sense on two levels:

(1) The DL brand means nothing here: everyone grew up with their local airlines and Northwest. Just look at how they've been down-gauging regional flights lately: 757s to BKK and SGN, for crying out loud.

(2) NW didn't have any logical place to rotate widebodies on the US side, so it made operational sense to park those planes overnight in Asia rather than pay NRT's exorbitant fees. DL, on the other hand, could easily send planes straight home from NRT and rotate them to transcons or Latin America flights like AA does.

AA conversely has a lot to lose if their JAL relationship goes down the drain. Oneworld without JAL would have nearly nothing in Japan save a few AA, BA, CX and QF trunk routes. I could easily see AA in a bidding war with DL to keep the JL relationship intact, even if they have no further aspirations in Asia.

Also, domestic feed may not mean much to the average international traveler, but about 70% of the Japanese population lives outside the Tokyo area, and the regional airports have much less international service than NRT. There are many multinationals located out in the sticks and there is a growing interest in tourism around those areas (witness Australians flocking to Hokkaido for the northern ski season). Is it enough for DL to consider an ATL-CTS route? Probably not, but it is more than enough to make domestic feed attractive to an investor.

The incoming Government, which still has some say about what JL does, is not so keen about the relationship with the U.S., but is looking more to their Asian neighbors as their priority.

I don't think that really matters here. What matters is that the incoming government has railed against corporate welfare. The analysts here are looking to JAL as a test case for the DPJ's willingness to keep antiquated companies afloat. If there is no public money forthcoming, JAL will get more desperate to ink a private deal.

I sincerely hope that JAL is not getting any public funds, simply because I fly ANA and don't want to see them at a competitive disadvantage to a more poorly-managed rival. Public funds would be bad for JAL passengers too. The airline desperately needs a kick in the butt.

Japanese analysts view the US bilateral as more restrictive on Japan than on the US. Just look at the myriad traffic rights that NW and UA have out of NRT, and what does Japan get in return? JFK-GRU on JL... hardly balanced. Not to say that there aren't restrictions on US carriers, but the restrictions run both ways.

Where on earth do the Japanese carriers want fifth freedom rights to beyond the US? Surely they'd rather fly to Europe directly from NRT rather than over North America? Besides South America (and specifically just Brazil), I really can't think of any beyond traffic flows that JL or NH would ever use even if they had the rights.

NRT, on the other hand, is a terrific place for DL (and to a lesser degree UA, as they have SFO) to aggregate demand for Asian destinations that don't merit daily widebody non-stop service from the US mainland.

In the last round of bilateral negotiations, the US was pushing for Open Skies. Japan refused, mainly because they wanted to restrict HND / NRT access. Instead they offered to significantly liberalize rights to NGO. Yeah right.

Your second sentence is correct, but this looks like it could be a very different deal than a simple financial investment.

Monday's Wall Street Journal (http://online.wsj.com/article/SB125279250097406221.html) says that Delta is negotiating a $300 million investment for a 5% stake, which will make them the single largest shareholder in JAL but by no means remotely close to a stake that influences strategy.

That said, a Transpacific joint venture, whether with AA or DL, makes a lot of sense for JAL. A Delta JV in particular will create the strongest Transpacific carrier yet, since DL is already the largest US carrier at NRT. If a token equity investment is the way to "buy" JL's acceptance of a JV, then so be it.

I thought it was too obvious to state for me, that JAL needs cash infusion, an investment of some sort. I still question, why DL, mainly a US domestic carrier with interests primarily out of ATL, would be coming to the rescue.
A codeshare would not be a profitable venture for JL per se. NW/DL cannot provide any significant amount of codeshare traffic to the table now, as reflected in the traffic as it exists. What does DL bring to the table? One late night departure to their existing destinations and a very early departure back to NRT? How is that going to help JL? How could traffic increase with a JL partnership? JL already has a partnership with AA.
The Hokkaido traffic ex Australia is an isolated phenomena, but in no way whatsoever, would and could it influence any DL/JL or QF/AA/JL relationship, especially since it is seasonably restricted. If this increases in volume, LCC would quickly enter the market. Not the Japanese carriers, but QF with their Jetstar subsidiary, which already serves KIX ( as far as I know, but you may correct me on this ). However, that is all in foreign hands, without any JL/NH input, and not one of these Japanese carriers has a LCC subsidiary. The few and I can only think of one, Japanese LCC are not making any dent in the Japanese domestic traffic.
As far as the DPJ goes, I feel, they will make a stand with JL. It is too Japanese to let it fail or beg for "foreign" funds. Imagine France, Britain or Germany let AF, BA or LH fail. There is just no way, no matter how "private" their carriers are.

I don't think that really matters here. What matters is that the incoming government has railed against corporate welfare. The analysts here are looking to JAL as a test case for the DPJ's willingness to keep antiquated companies afloat. If there is no public money forthcoming, JAL will get more desperate to ink a private deal.

I sincerely hope that JAL is not getting any public funds, simply because I fly ANA and don't want to see them at a competitive disadvantage to a more poorly-managed rival. Public funds would be bad for JAL passengers too. The airline desperately needs a kick in the butt.

This is exactly like the U.S. and GM. The DPJ will have to prop up JL, it is just impossible to think that they let their National carrier fail or be taken over by a foreign, let alone an American entity. I think, they would prefer a Chinese company to an American company, wouldn't you agree, especially now. ? But I personally think that NHK and JL will be getting away with anything, now and in the future, just because they are a Japanese institution. However, I wouldn't be surprised to be wrong...

Which one you guys actually prefer?

I personally would prefer a OneWorld and an AA code share tie-up. Just wondering why this did not happen earlier. I mean, JL is known to be in financial trouble for quite a while. This did not happen overnight. Everybody and their brother knew about this for years. :confused:

I think, they would prefer a Chinese company to an American company, wouldn't you agree, especially now. ?

Are you kidding? The executive who arranged that deal would be murdered by right-wingers the next day.

Are you kidding? The executive who arranged that deal would be murdered by right-wingers the next day.

Maybe a Chinese bidder could provide him with Shaolin-trained bodyguards?. ;) One mainland Chinese gent I know uses the service of a few ex-military chaps with that sort of background.

But it would indeed be strange if JAL would not have had any talks with Chinese parties.

Are you kidding? The executive who arranged that deal would be murdered by right-wingers the next day.

I am sure you understood that this was a stretch. However, you understand as well, that Japan's future lies with China, not with the U.S. They need to go where the money is. And of course that's where their markets have to be. WW2 brought a change in directions, that is over now and they will need to redirect their priorities ( as might the rest of the world ). There is not much choice especially when you consider the state of the Japanese economy.

There is about as much chance of JAL taking on a Chinese investor as there is of them taking on a N. Korean investor (let alone S. Korean). You are dreaming, and it is obvious that your peronal ideals and views are not shared by those who make such decisions. Furthermore your views that DL is primarily a US domestic carrier mostly out of ATL are perhaps 17 years old (before their big int'l expansion in the early 1990's). Delta even before the NW merger had more int'l flights in a day than all Japanese carriers combined have in several days. While DL had few Asian flights, perhaps you have missed out on the 50 or so daily flights they have to Europe, The 40 or so to South and Central America, their numerous Caribbean flights, not to mention their flights to Africa, etc.

I personally would prefer a OneWorld and an AA code share tie-up. Just wondering why this did not happen earlier. I mean, JL is known to be in financial trouble for quite a while. This did not happen overnight. Everybody and their brother knew about this for years. :confused:

Well they were getting better and turned back into profit. But these changes when the current financial and oil crisis began last year

JAL could well refocus itself on providing a safe, high quality experience again under Delta's tutelage.
[emphasis added]

:eek: You cannot possibly be serious?

If JAL's service standards fall to DL levels, I will switch to NH in a heartbeat (much as I dislike NH...)

Stop putting JAL on a pedestal. It sounds foolish to do so because the carrier has fallen behind it's Asian an North American peers in many respects, not the least of which is spending large sums to install a Business Class product inferior to Delta's lie flat seating. JAL could well refocus itself on providing a safe, high quality experience again under Delta's tutelage.

If their level drops to there, I think I will need to change my name as well
and drop out of their FFP!

You guys do know that Delta has a pretty good reputation at the operational level in Asia, especially when several years ago they seconded personnel to KAL and straightened out the airline, right? AA has no such track record.

You guys do know that Delta has a pretty good reputation at the operational level in Asia, especially when several years ago they seconded personnel to KAL and straightened out the airline, right? AA has no such track record.

But the vast majority of DL's ops in Japan are legacy Northwest.

:eek::eek:

Yes and NW has been highly regarded and respected in Japan. The operations people there remain the same.

It's interesting to read stories about this matter.

I have checked several Japanese news articles and picked up some that interested me. I have also checked US based news sites and I noticed they treat this news somewhat differently.

All the URLs are in Japanese. Please use translation service if you are interested.

--
Japanese government won't help the zombie company, said a member of Japanese ruling party.
http://jp.reuters.com/article/topNews/idJPJAPAN-11490720090914

We can expect Nissan Motors type recovery for JAL if foreign capital is injected, a banker said.
http://www.jiji.com/jc/c?g=ind_30&k=2009091400860

Ministry of Transportation of Japan prefers DL as a partner of JL due to the fact that DL operates 140 transpacs per week while AA does 35.
http://www.jiji.com/jc/c?g=ind_30&k=2009091400838

DPJ, which recently won in the general election, has pledged open sky. DL got afraid it might lose new opportunity because it doesn't have a partner in Japan.
http://www.yomiuri.co.jp/atmoney/enterprises/manda/20090914-OYT8T00334.htm

JL may be expecting "Gaiatsu" (foreign pressure) to boost restructuring.
http://sankei.jp.msn.com/economy/business/090912/biz0909120107000-n2.htm

And the next one I liked the best.
"If JL and DL agree to affiliate, Oneworld and SkyTeam will inevitably be integrated." said someone in a major securities house. Then "2 "major alliances (Star, OW+ST) will fight for the market.
Original URL not accessible any more.
http://www.morningstar.co.jp/portal/RncNewsDetailAction.do?rncNo=108595
Maybe morningstar.co.jp has withdrawn it. Following is from a cache.
「ＪＡＬとデルタが提携すれば、必然的にワンワールドとスカイチームは統合される」（大手証券）とされ、デ ルタとＪＡＬの提携なら世界的な航空再編につながる可能性は高い。そうなれば、全日本空輸（Ａ ＮＡ） <9202> が所属するスターアライアンスとの２大陣営が ...

I still question, why DL, mainly a US domestic carrier with interests primarily out of ATL, would be coming to the rescue..

You need to move into 2009. Delta is no longer the 'redneck' carrier you like to often portray it to be. DL's total systemwide capacity for the first eight months of 2009 was 60% domestic and 40% international, the same as AA, which was at 61% domestic and 39% international. If one of your primary criteria for why DL should not be investing in JL is because it is a 'domestic carrier', that same logic would apply to AA, now, wouldn't it?


What does DL bring to the table? One late night departure to their existing destinations and a very early departure back to NRT? How is that going to help JL? How could traffic increase with a JL partnership? ..

DL brings something to JL far more valuable than AA: elimination of a decent-sized competitor at NRT. Why do you think the government is favoring a DL tie-up? If a DL-JL JV/partnership goes through, they would be cooperating with each other instead of competing...consolidation at this point helps JL far more than you give it credit....

JL already has a partnership with AA..

Yes, for close to a decade now, and what exactly has it gotten JL? JL is still bleeding like a basket case despite the AA partnership, despite all the wonderful feed that AA is supposedly offering....

I think the WSJ's assessment is pretty good:

http://online.wsj.com/article/BT-CO-20090914-708631.html

the stakes are high for american/ow here.

o sora, that's hilarious the way the japanese press thinks it might lead to a merger of the two alliances.

the Delta-JAL deal broke first in Japanese; the American-JAL broke first in English.

I think the WSJ's assessment is pretty good:

http://online.wsj.com/article/BT-CO-20090914-708631.html

the stakes are high for american/ow here.

o sora, that's hilarious the way the japanese press thinks it might lead to a merger of the two alliances.

the Delta-JAL deal broke first in Japanese; the American-JAL broke first in English.

It might be possible to see OW broken up and carriers joining different alliance. But IMHO two merging together is really highly unlikely...but what do i know :p

Cranky Flier came to the same conclusion (http://crankyflier.com/2009/09/14/american-and-delta-fight-strategic-battle-over-japan-air-lines/) that DL probably wants to shutter the NRT hub and put its Asia passengers on JAL flights instead. Most interesting quote:

Everyone in SkyTeam wins . . . except for Korean. Poor Korean would be demoted to second place in the North Pacific, and it would likely very seriously look at defecting to oneworld where it could take JAL’s place as top dog in the region (or only dog, as the case may be).

Yes and NW has been highly regarded and respected in Japan. The operations people there remain the same.

The problem is that your Japanese Ma and Pa Kettles (and, for that matter, Taro Salaryman) have known "Northwest" all their lives and have known "United" ever since it bought Pan Am's Pacific operation, but have no clue about "Delta." And Delta is making very little effort to market its brand here.

All I've seen on the ground are a few advertisements in Otemachi, the largest subway station in the financial district, which appear to be rather wonky direct translations of the merger advertisements that have appeared in the US and elsewhere, indicating that Delta hasn't even bothered to locate decent Japanese marketing assistance.

There is still no Japanese Skymiles credit card, even though AAdvantage and OnePass have each offered multiple cards in Japan for years.

Delta is simply not serious about this side of the world.

The problem is that your Japanese Ma and Pa Kettles (and, for that matter, Taro Salaryman) have known "Northwest" all their lives and have known "United" ever since it bought Pan Am's Pacific operation, but have no clue about "Delta." And Delta is making very little effort to market its brand here.

All I've seen on the ground are a few advertisements in Otemachi, the largest subway station in the financial district, which appear to be rather wonky direct translations of the merger advertisements that have appeared in the US and elsewhere, indicating that Delta hasn't even bothered to locate decent Japanese marketing assistance.

There is still no Japanese Skymiles credit card, even though AAdvantage and OnePass have each offered multiple cards in Japan for years.

Delta is simply not serious about this side of the world.

Well not anymore. Even JAL doesn't end up siding with Delta, most people should have heard of it by now if they follow the news right. It's a smart move of Delta to advertise itself without paying much (w/o the investment) :D

The problem is that your Japanese Ma and Pa Kettles (and, for that matter, Taro Salaryman) have known "Northwest" all their lives and have known "United" ever since it bought Pan Am's Pacific operation, but have no clue about "Delta." And Delta is making very little effort to market its brand here.

This just isn't a big deal. United was able to rebrand Pan Am's operation quite successfully as you point out, and I'm sure Delta can do the same once the dust on the JAL situation settles. So much of the Japanese market relies on sales & distribution channels rather than direct-to-consumer, that a marketing campaign focused on select core agency relationships -- which doesn't require ads in Otemachi -- can turn awareness around quite nicely. If DL develops a JAL relationship, that'll give them all the brand awareness they need.

Some part of the new Delta's sales and distribution team at ATL headquarters are from legacy Northwest. They know the Japanese market just fine. It probably just hasn't been a big focus of theirs for now relative to the enormity of other post-merger integration efforts and issues.

Looks like Air France/KLM has also joined the race.....

http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSN1452655820090915

Thanks for your reply, virmaior.

I think the WSJ's assessment is pretty good:

http://online.wsj.com/article/BT-CO-20090914-708631.html

I read it and I agreed. The sentence "But Oneworld appears to be in a lose-lose situation." is quite to the point, I think.

BTW the article is only partially displayed from the URL above but if you access it through google news, the whole article can be displayed.

o sora, that's hilarious the way the japanese press thinks it might lead to a merger of the two alliances.

Yeah, it is as funny as the 2007 April Fool thread:
http://www.flyertalk.com/forum/united-mileage-plus/677473-starworld-star-alliance-one-world-merge.html

Thank you, virmaior. As a learner of English, I am thrilled to know I presented something you can call hillarious.

the Delta-JAL deal broke first in Japanese; the American-JAL broke first in English.

Japanese government seems to favor DL and Federal Government looks like preferring AA.

AA has announced new Double Mile promo for JAL high yield fares.

https://www.aa.com/aa/viewPromotionDetails.do?itemDescriptor=PromotionCo ntent&fileName=A0808_JapanAirlines.xml&type=AAdvantageSpecialOffers&anchorLocation=Navigation+Menu&url=A0808_JapanAirlines.xml&_locale=en_US&repositoryName=PromotionContentRepository&repositoryId=16097029

AA seems to be trying to assist JAL and to bring it home to JAL that JAL owes much to AA.

Still, AA is selling miles to JAL, and earns money.;)

AA seems to be trying to assist JAL and to bring it home to JAL that JAL owes much to AA.

seriously..if DL gets control over JL, it would mean JL is going to drop out of being a high quality airline..and bunch of people dropping out of their program, which will make their balance book even worse I guess

JAL has been losing money hand over fist and are getting desperate. Didn't they just announce another big cut in jobs and routes?

http://www.ft.com/cms/s/0/5c8f29a2-a1fd-11de-81a6-00144feabdc0.html?referrer_id=yahoofinance&ft_ref=yahoo1&segid=03058

If you think this will not also affect the current level of service you might be disappointed.

You guys do know that Delta has a pretty good reputation at the operational level in Asia, especially when several years ago they seconded personnel to KAL and straightened out the airline, right? AA has no such track record.

and now this

http://online.wsj.com/article/SB125303614325112753.html

so all in all Delta is clearly not considered a backward kind of airline. In any case what Delta is trying to do (with help from AF/KL) is ton drag JAL out of oneworld and into Skyteam. Time will tell how it all works out.

BA entering the fray: http://www.thestreet.com/story/10598871/1/british-airways-may-join-jal-pursuit.html?cm_ven=GOOGLEFI

with so many oneworld trying to save JAL, one may see CX coming in later as well

with so many oneworld trying to save JAL, one may see CX coming in later as well

I highly doubt this. What's there for CX to gain? They might actually benefit in some way if JAL leaves OW. CX will be the only OW carrier in Asia (that's assuming OW doesn't fall apart).

AA raised $2.9B fresh funding for JAL bidding war.

http://online.wsj.com/article/BT-CO-20090917-707023.html

The parent of American Airlines said Thursday that it had raised $2.9 billion in fresh funding, repairing one of the sector's weakest balance sheets and potentially paving the way to buy a stake in Japan Airlines.

Folks, I find all the talk of the gaijin takeover of JAL pretty amusing and silly. The potential stakes in JAL by foreign carriers would at most be around 10%, most likely in the 5% range, hardly controlling stakes. It's mostly about code sharing:rolleyes:

JAL is Japan's flagship carrier. While I agree in theory capital should flow freely to whatever industry, and inefficient companies should consolidate. But here in the real world, every major economic power protects its own flagship carrier, for better or worse, and Japan is no exception.

Yes, hence why despite the title we all know that it would be a minority stake. Thanmks for dropping in several days after the fact just to confirm that again for the nth time..

Yes, hence why despite the title we all know that it would be a minority stake. Thanmks for dropping in several days after the fact just to confirm that again for the nth time..

I had to post after reading an article in the FT saying how the Japanese government should allow a foreign carrier to takeover JAL, not just being a minority investor.

I'm curious how would they feel if say, cash rich Air China starts a takeover bid of British Airways.

Given that OW is the smallest of the three alliances, wouldn't joining Skyteam give JAL greater network feed? Perhaps DL/NW/AF/KL is greater than BA/AA.

[emphasis added]

:eek: You cannot possibly be serious?

If JAL's service standards fall to DL levels, I will switch to NH in a heartbeat (much as I dislike NH...)

I've never flown JL, but based on my AA and DL experiences, if JL's service is at the level of AA, a DL investment could only cause it to "fall upwards".

I've never flown JL, but based on my AA and DL experiences, if JL's service is at the level of AA, a DL investment could only cause it to "fall upwards".

Geeze...JL's service is far superior than AA's. Maybe you should try flying on them on your next flight to Japan :p

Geeze...JL's service is far superior than AA's. Maybe you should try flying on them on your next flight to Japan :p

I'm sure it's superior and I definitely look forward to it. But that wasn't the point I was making.

The quote implied that an investment in JL by DL would cause JL's service to "fall" to DL levels. This is unlikely, given that after 10 years of co-operating with AA, JL's service hasn't plummeted to AA levels - which IMHO are much lower than DL's and almost approaching UA levels.

The quote implied that an investment in JL by DL would cause JL's service to "fall" to DL levels. This is unlikely, given that after 10 years of co-operating with AA, JL's service hasn't plummeted to AA levels - which IMHO are much lower than DL's and almost approaching UA levels.

It could be just me but AA's service seemed rather improved since JL joined. Or it could be just me who don't see JL's service that much far better.

per creditor request

http://www.marketwatch.com/story/jal-creditors-seek-to-divide-carrier-report-2009-09-21?siteid=rss&rss=1

I agree, and another past experience is the re-integration of Song into DL ... it actually positively impacted DL service introducing IFE, Food for Purchase program, etc.

Knowing Japanese culture, I do not think they would actually be easily influenced into degrading their service! AF influence may be bad though ;)

I'm sure it's superior and I definitely look forward to it. But that wasn't the point I was making.

The quote implied that an investment in JL by DL would cause JL's service to "fall" to DL levels. This is unlikely, given that after 10 years of co-operating with AA, JL's service hasn't plummeted to AA levels - which IMHO are much lower than DL's and almost approaching UA levels.

I had to post after reading an article in the FT saying how the Japanese government should allow a foreign carrier to takeover JAL, not just being a minority investor.

I'm curious how would they feel if say, cash rich Air China starts a takeover bid of British Airways. For my 2 cents I think Delta would be the best choice, combining all NRT- Asia flights would be a plus for both JAL & DELTA

For my 2 cents I think Delta would be the best choice, combining all NRT- Asia flights would be a plus for both JAL & DELTA

Yes and an essential minus for the price of all those routes in asia (by which I mean the prices would go up with the reduced competition -- unless there's Kenseyian magic afoot).

per creditor request

http://www.marketwatch.com/story/jal-creditors-seek-to-divide-carrier-report-2009-09-21?siteid=rss&rss=1

How would that work? Would they sell the profitable half, while the Japanese government keeps the unprofitable half?

Yes and an essential minus for the price of all those routes in asia (by which I mean the prices would go up with the reduced competition -- unless there's Kenseyian magic afoot).

There's been a lot of Keynesian magic afoot lately, I expect it will flow through into air fares too.

I am watching a news program by TBS, Japan.

It says that JAL has put DL deal on the shelf. Looks like JAL is waiting for government to take an action.

Yes and an essential minus for the price of all those routes in asia (by which I mean the prices would go up with the reduced competition -- unless there's Kenseyian magic afoot).

I don't know. It depends on how willing the government would be to police collusion. There are at least two carriers on all the trunk routes out of Japan to Asia, and usually three or four to major cities.

I am watching a news program by TBS, Japan.

It says that JAL has put DL deal on the shelf. Looks like JAL is waiting for government to take an action.

More confirmation - not just the DL deal but also the AA deal are on the shelf as it focuses on the government restructuring plan.

http://news.airwise.com/story/view/1254739127.html

Just out of curiosity...any possibility Delta never really expected JAL to succeed and just wanted more leverage to pick at the corpse?

I recently heard rumors of Delta and JAL working on negotiations from an engineer for former NWA now Delta. It appears that Delta and Skyteam are trying to leverage JAL to join Skyteam to expand the brand and 'replace' the loss of Continental. Delta orignally purchased NWA to leverage the Asia routes that NWA had. He also stated that there is some discussions going on about hubs and the cost of landing rights in each. I am not sure it will hold well for Cincinnati if that is true.

A luggage agent at the claims area I know also stated they had read something about Delta and JAL becoming partners. She didn't elaborate much but said it was out for announcement to the employees so something must be actually happening. Time will tell!! I happen to be a fan of NWA and feel OK about Delta. Of all my limited experiences, Delta is my favorite of the big airlines. While United agents are friendly and try hard, they have consistently lost my luggage and I have had many mechanical issues with them. American agents are just plain grumpy and the airline experience is lackluster. Continental has always been my favorite from a customer service stand point but never great about having the planes with first class seats...

Mike:p

If the luggage agent knows something it must be true.

Rumour has it ..... that the talks are back on again .. with both DL and AA

http://www.bloomberg.com/apps/news?pid=20601080&sid=a1HYqNanyfnE

Oct. 19 (Bloomberg) -- Japan Airlines Corp., seeking its fourth state bailout since 2001, resumed talks with Delta Air Lines Inc. and AMR Corp.’s American Airlines over a possible capital alliance, three people familiar with the matter said.

American and Delta sent executives to Tokyo last week to renew negotiations with Japan Air’s management, said the people, who declined to be identified because the talks aren’t public. The parties halted talks in September while a government-led task force examined options to aid the company, the people said.

It looks like TPG (Texas Pacific Group) will possibly be joining AA & OW in their bid for JL.

TPG May Team With American Airlines on JAL Investment (http://www.bloomberg.com/apps/news?pid=20601080&sid=aHSEeVOGKiS0)

Looks like a bidding war is about to start for JAL:

Delta Offers $1 Billion to Japan Airlines (http://www.nytimes.com/aponline/2009/11/18/business/AP-AS-Delta-Japan-Airlines.html?hpw)

Looks like a bidding war is about to start for JAL:

Delta Offers $1 Billion to Japan Airlines (http://www.nytimes.com/aponline/2009/11/18/business/AP-AS-Delta-Japan-Airlines.html?hpw)

Either AA or DL as owners of JL can only be good news for NH as it is bound to drive JL service lower and lower nearer to the AA & DL 'standard'
Happy that I will be burning all of my AA miles for a F class award trip NRT-CDG-NRT next month hopefully before any 'takeover' !

I'm not seeing how it would drive service lower for JL. At least any more than the existing issues monetary issues. It's not like they would be merging with JL with DL.

The upside to JL is DL might abandon some legacy routes that it got when it acquired NW that duplication JL routes. If you recall DL is the third largest airline in Japan behind JL and NH because NRT was a hub for NW.

If JL was lucky they could get a revenue sharing agreement like AF/KL has with DL/NW.

From a DL perspective, it would open a number of additional routes in NRT. Right now DL has 9 US-NRT routes and 12 NRT-Asia routes. That's a pretty decent 1-stop matrix of US/Asia routing.

If they come together they can code share JFK, LAX and SFO (saving costs) as well as add ORD into the US matrix. They would also have many additional Japanese domestic connections and JL international destinations.

In addition, there would be connection opportunities in NGO.

So, from a certain perspective, DL does offer JL more than AA ever could in terms of route and connection. There's a question about DL's willingness to share revenue, and the fact that NW had an extremely large FFP in Japan. My guess is DL is looking for a way in Japan as is. Day one of the merger they fired most of the senior Asia program management and the program has been messed up ever since. Making a deal with JL gives DL management some cover for their blunders.

Again, I really love all this talk about such high service standards on JAL, as anyone who has flown JAL frequently knows, they have never been that great......

If JL was lucky they could get a revenue sharing agreement like AF/KL has with DL/NW.



If they come together they can code share JFK, LAX and SFO (saving costs) as well as add ORD into the US matrix. They would also have many additional Japanese domestic connections and JL international destinations.


I think both of these are somewhat problematic from an anti-trust perspective. Even if the Japanese government would go for it, I am not sure that the US would be cool with that. It would look especially incongruous to allow DL to codeshare with JL in Japan while hampering the BA/IB/AA cooperation.

Again, I really love all this talk about such high service standards on JAL, as anyone who has flown JAL frequently knows, they have never been that great......

This is news to me :p

I think both of these are somewhat problematic from an anti-trust perspective. Even if the Japanese government would go for it, I am not sure that the US would be cool with that. It would look especially incongruous to allow DL to codeshare with JL in Japan while hampering the BA/IB/AA cooperation.

True, but keep in mind that BA/IB/AA present a significant force on NYC-LHR. JL and DL are barely a blip in SFO and ORD. LAX is a focus city for DL, but they aren't any bigger than AA, or UA and NH runs to NRT there too. Not that Anti-trust authority is automatic, I just think they have a better shot at getting it based on the existing route network.

This is news to me :p

And me. ;)

I am still curious about the reaction of Korean on this? What reason would they have to remain in Skyteam if the lucrative US - China routes are handed to JAL on a silver plate?

I am still curious about the reaction of Korean on this? What reason would they have to remain in Skyteam if the lucrative US - China routes are handed to JAL on a silver plate?

Has KE every had a cut of US-China? You'd have to connect to ICN, and it's not like SkyTeam has put a lot of code-shares in to support KE. Besides, NW's goal has always been to fly over NRT to direct connections into the more affluent parts of China. They've always figured they could fetch a premium on the direct flights.

I am still curious about the reaction of Korean on this? What reason would they have to remain in Skyteam if the lucrative US - China routes are handed to JAL on a silver plate?

How would that be any different to NH and OZ currently both being in Star Alliance? They have co-existed for many years.