[merged] JAL potential bankruptcy / takeover by DL or AA
Jan 2, 2010, 6:21 pm
#16
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Jan 2, 2010, 7:55 pm
#17
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I disagree.
JAL hasn't been part of OW for all that long (<5yrs?)
and OW would still have CX for Asia if JAL left
Now it has MX, giving better coverage in its part of the world
and with S7 joining this year...
But IMHO, what OW really needs is an airline that has good coverage of Africa
JAL hasn't been part of OW for all that long (<5yrs?)
and OW would still have CX for Asia if JAL left
Now it has MX, giving better coverage in its part of the world
and with S7 joining this year...
But IMHO, what OW really needs is an airline that has good coverage of Africa
Jan 2, 2010, 7:57 pm
#18
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Jan 2, 2010, 10:05 pm
#19
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http://www.reuters.com/article/idUSTRE60204O20100103
I didn't realize that DL and AA are in active competition to help JL financially. And JL's CEO is quoted as saying that he prefers Delta's offer to that of American... nice way to stab your friends in the back
In an interview conducted on Friday and published on Sunday, the Asahi also said JAL President Haruka Nishimatsu preferred Delta Air Lines as the carrier's overseas partner to American Airlines.
A government-backed turnaround fund has told JAL's main creditors it favors a bankruptcy proceeding as part of a rescue package for Asia's largest carrier by revenue, sources with knowledge of the matter have told Reuters.
But Nishimatsu is against the plan, suggesting tough negotiations ahead between the airline and the Enterprise Turnaround Initiative Corp of Japan (ETIC), the Asahi said.
"The image (of bankruptcy) would affect us and we would lose customers," Nishimatsu was quoted as saying. "If we lose recognition from customers, restructuring would be difficult and this will trouble the ETIC too."
JAL's shares hit a record low last week on expectations that it was headed for bankruptcy.
The Asahi also said Nishimatsu was eyeing an alliance with Delta and the SkyTeam airline group, ending its current ties with American Airlines and the oneworld alliance.
A government-backed turnaround fund has told JAL's main creditors it favors a bankruptcy proceeding as part of a rescue package for Asia's largest carrier by revenue, sources with knowledge of the matter have told Reuters.
But Nishimatsu is against the plan, suggesting tough negotiations ahead between the airline and the Enterprise Turnaround Initiative Corp of Japan (ETIC), the Asahi said.
"The image (of bankruptcy) would affect us and we would lose customers," Nishimatsu was quoted as saying. "If we lose recognition from customers, restructuring would be difficult and this will trouble the ETIC too."
JAL's shares hit a record low last week on expectations that it was headed for bankruptcy.
The Asahi also said Nishimatsu was eyeing an alliance with Delta and the SkyTeam airline group, ending its current ties with American Airlines and the oneworld alliance.
Jan 2, 2010, 10:25 pm
#20
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JL will likely to continue to operate (similar to chapter 11 in the US) as usual. There will be virtually no effect on your journey unless your route is suspended. I don't see JL being liquidated (chapter 7) in the foreseeable future.
Jan 3, 2010, 6:44 am
#21
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Japan Airlines has state-funded aid doubled
http://news.bbc.co.uk/1/hi/business/8438337.stm
The Japanese government has agreed to double the offer of state-funded credit to Japan Airlines (JAL) to 200bn yen ($2.2bn; £1.3bn).
A state-run bank offered JAL aid of 100bn yen in November, and has already paid out more than half of that.
Shares in JAL, which made a loss in four of the past five years, fell to record lows last week as speculation mounted it would file for bankruptcy.
Like many airlines, JAL has been hit hard in the global economic downturn.
The extra funding was agreed by Deputy Prime Minister Naoto Kan, Transport Minister Seiji Maehara and other ministers at a meeting on Sunday.
"The government has decided to expand from 100bn yen to 200bn yen the line of credit from the Development Bank of Japan to Japan Airlines," an official statement said.
The announcement was made before trading resumes on the Tokyo Stock Exchange on Monday, after the New Year's holiday.
http://news.bbc.co.uk/1/hi/business/8438337.stm
The Japanese government has agreed to double the offer of state-funded credit to Japan Airlines (JAL) to 200bn yen ($2.2bn; £1.3bn).
A state-run bank offered JAL aid of 100bn yen in November, and has already paid out more than half of that.
Shares in JAL, which made a loss in four of the past five years, fell to record lows last week as speculation mounted it would file for bankruptcy.
Like many airlines, JAL has been hit hard in the global economic downturn.
The extra funding was agreed by Deputy Prime Minister Naoto Kan, Transport Minister Seiji Maehara and other ministers at a meeting on Sunday.
"The government has decided to expand from 100bn yen to 200bn yen the line of credit from the Development Bank of Japan to Japan Airlines," an official statement said.
The announcement was made before trading resumes on the Tokyo Stock Exchange on Monday, after the New Year's holiday.
Jan 3, 2010, 8:27 pm
#22
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In Asia, definitely thin. If JL moves to ST, it will have one hub in Asia in HKG, versus:
Star - 6 hubs SIN, BKK, NRT, ICN, PVG, PEK (plus BOM when Air India joins)
SkyTeam - 4 hubs ICN, CAN, PEK, NRT (plus SGN when Vietnam Airlines joins and CGK when Garuda joins).
If you're based in Asia but not in Hong Kong and travel within the region, OW looks decidedly weak. It really needs to keep JL, and win a few others like MH and 9W to beef up.
As for KE, I don't see why one of the founding members of SkyTeam would leave just as they are starting to reach critical mass in terms of members in the region. One of the reasons I'd read from a Japanese government minister was that SkyTeam was preferable because it gives more Asian partners. I'm sure KE looks at it the same way, which was why it was involved in the negotiations in the first place.
Star - 6 hubs SIN, BKK, NRT, ICN, PVG, PEK (plus BOM when Air India joins)
SkyTeam - 4 hubs ICN, CAN, PEK, NRT (plus SGN when Vietnam Airlines joins and CGK when Garuda joins).
If you're based in Asia but not in Hong Kong and travel within the region, OW looks decidedly weak. It really needs to keep JL, and win a few others like MH and 9W to beef up.
As for KE, I don't see why one of the founding members of SkyTeam would leave just as they are starting to reach critical mass in terms of members in the region. One of the reasons I'd read from a Japanese government minister was that SkyTeam was preferable because it gives more Asian partners. I'm sure KE looks at it the same way, which was why it was involved in the negotiations in the first place.
Jan 3, 2010, 9:19 pm
#23
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In Asia, definitely thin. If JL moves to ST, it will have one hub in Asia in HKG, versus:
Star - 6 hubs SIN, BKK, NRT, ICN, PVG, PEK (plus BOM when Air India joins)
SkyTeam - 4 hubs ICN, CAN, PEK, NRT (plus SGN when Vietnam Airlines joins and CGK when Garuda joins).
If you're based in Asia but not in Hong Kong and travel within the region, OW looks decidedly weak. It really needs to keep JL, and win a few others like MH and 9W to beef up.
As for KE, I don't see why one of the founding members of SkyTeam would leave just as they are starting to reach critical mass in terms of members in the region. One of the reasons I'd read from a Japanese government minister was that SkyTeam was preferable because it gives more Asian partners. I'm sure KE looks at it the same way, which was why it was involved in the negotiations in the first place.
Star - 6 hubs SIN, BKK, NRT, ICN, PVG, PEK (plus BOM when Air India joins)
SkyTeam - 4 hubs ICN, CAN, PEK, NRT (plus SGN when Vietnam Airlines joins and CGK when Garuda joins).
If you're based in Asia but not in Hong Kong and travel within the region, OW looks decidedly weak. It really needs to keep JL, and win a few others like MH and 9W to beef up.
As for KE, I don't see why one of the founding members of SkyTeam would leave just as they are starting to reach critical mass in terms of members in the region. One of the reasons I'd read from a Japanese government minister was that SkyTeam was preferable because it gives more Asian partners. I'm sure KE looks at it the same way, which was why it was involved in the negotiations in the first place.
It looks to me like ICN is blocked out. It is less than 800 miles from NRT where two ST airlines have a hub and less than 600 miles from PVG. Coming across the Pacific unless I'm a KE flyer (or going to Korea) Why would I choose connecting via ICN over NRT or PVG? Coming from the South both CAN & PVG seem to have an advantage if I'm going to stay in Asia and NRT is better to cross the North Pacific. If I start in Europe or the Middle East than SNG, CAN and PVG are more attractive than ICN.
Having major hubs in NRT and ICN seem to me to be the equivalent of having major hubs in both SFO and LAX. Both are great places and having a hub in either one is reasonable, but given that they are on the edge of the continent and have similar weather pattens I can't see why it is good to have both.
Jan 3, 2010, 10:50 pm
#24
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Having major hubs in NRT and ICN seem to me to be the equivalent of having major hubs in both SFO and LAX. Both are great places and having a hub in either one is reasonable, but given that they are on the edge of the continent and have similar weather pattens I can't see why it is good to have both.
- travel between Japan and Korea is a large market, this gives the ability to codeshare on flights between other Japanese and Korean airports
- ICN and NRT are more different markets than LAX/SFO. Star Alliance manages with hubs at both (with PEK and PVG nearby). Having SIN and BKK as hubs even closer than NRT and ICN also works for them.
- proximity can be used to provide travelers with more options and better timing as AFKL have done with CDG and AMS
- as a traveler, alliances with more members in a region are more likely to get business travelers because of the alliance (e.g. I can fly SIN-NRT-ICN-PEK-SIN on SkyTeam or Star, vs SIN-NRT-ICN-NRT-PEK-HKG-SIN on OW - 2 less flights saving lots of valuable time).
I'd imagine KE would be more excited about those than joining OW.
Jan 4, 2010, 4:09 am
#25
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Simple: ICN offers much more relaxed landing restrictions than NRT.
NIMBY opposition at NRT placed very strict landing "slots" restrictions. As such, all North American flights in NRT arrives late in the afternoon (which also restricts departure flights out of North America as well), which really does not add any great connection possibilities there; you either get a night time connection arriving at an Asian destination very late at night, or you're forced an overnight at one of NRT's over priced airport hotels for a connection the next day. To put in simpler terms, if your flight from the US arrives at NRT at 4PM and NRT closes at 11PM, you only have 7 hours worth of onward flights to work with and that ain't much, especially with slotting issues. But you can't arrive at NRT faster because of strict slotting restrictions. Just search for yourself, it's not just AA, it's everyone UA, DL, AC, even JL and NH's own North American flights are within the 2PM-6PM range of arrivals/departures at NRT>
In contrast, ICN has a much more relaxed airport that is located in the "sweet" spot between PVG and NRT. It's almost a 24 hour airport; allowing late night US departure flights and early morning ICN arrivals. By having an early morning ICN you're practically given much more choices for almost an entire day. There no slotting restrictions either so you have more variety of choices to work with at various times of hours. You can leave LAX at midnight, sleep on the plane, awake 6AM at ICN and practically have an entire days worth of flights to connect onwards to your final destination. ICN is like our 24 hour CVS or Walgreens - it's available when you need it so there's a lot of flexibility.
NIMBY opposition at NRT placed very strict landing "slots" restrictions. As such, all North American flights in NRT arrives late in the afternoon (which also restricts departure flights out of North America as well), which really does not add any great connection possibilities there; you either get a night time connection arriving at an Asian destination very late at night, or you're forced an overnight at one of NRT's over priced airport hotels for a connection the next day. To put in simpler terms, if your flight from the US arrives at NRT at 4PM and NRT closes at 11PM, you only have 7 hours worth of onward flights to work with and that ain't much, especially with slotting issues. But you can't arrive at NRT faster because of strict slotting restrictions. Just search for yourself, it's not just AA, it's everyone UA, DL, AC, even JL and NH's own North American flights are within the 2PM-6PM range of arrivals/departures at NRT>
In contrast, ICN has a much more relaxed airport that is located in the "sweet" spot between PVG and NRT. It's almost a 24 hour airport; allowing late night US departure flights and early morning ICN arrivals. By having an early morning ICN you're practically given much more choices for almost an entire day. There no slotting restrictions either so you have more variety of choices to work with at various times of hours. You can leave LAX at midnight, sleep on the plane, awake 6AM at ICN and practically have an entire days worth of flights to connect onwards to your final destination. ICN is like our 24 hour CVS or Walgreens - it's available when you need it so there's a lot of flexibility.
Jan 4, 2010, 4:46 am
#26
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Jan 4, 2010, 6:51 am
#27
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Jan 4, 2010, 9:19 am
#28
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A nice piece in the Economist summarizing the current situation:
http://www.economist.com/businessfin...mpaign=twitter
I like to occasionally trade airline stocks. Down 24% one day, up 30% the next?!?!? That sounds like fun!
http://www.economist.com/businessfin...mpaign=twitter
THE run-up to New Year is a time to tidy up loose ends in Japan so that in January everything starts afresh. For a fleeting moment, it looked as if the government was doing just that when, after months of indecisiveness, it hinted on December 30th that Japan Airlines might be headed for bankruptcy.
But after the shares slumped by 24% to an all-time low on the same day, ministers lost their nerve over sanctioning what could be one of Japan’s biggest corporate failures. Despite strong differences of opinion within the government a new support package was cobbled together over the holiday weekend, doubling the state-run Development Bank of Japan’s credit line to JAL, as the airline is called, to 200 billion yen ($2.2 billion).
That led to a 31% rally in JAL’s share price on January 4th, a huge jump even by the airline’s bumpy standards. It is unlikely to be the end of the rough ride for JAL’s investors, however, because for many reasons the future of Asia’s largest airline remains uncertain.
But after the shares slumped by 24% to an all-time low on the same day, ministers lost their nerve over sanctioning what could be one of Japan’s biggest corporate failures. Despite strong differences of opinion within the government a new support package was cobbled together over the holiday weekend, doubling the state-run Development Bank of Japan’s credit line to JAL, as the airline is called, to 200 billion yen ($2.2 billion).
That led to a 31% rally in JAL’s share price on January 4th, a huge jump even by the airline’s bumpy standards. It is unlikely to be the end of the rough ride for JAL’s investors, however, because for many reasons the future of Asia’s largest airline remains uncertain.
Jan 5, 2010, 3:26 am
#29
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KAL would very much like JAL in the same alliance. That very same arrangement works well for Asiana and ANA in Star Alliance.
ICN is a very advantageous hub. It's sort of the Minneapolis of Asia. KAL also does a tremendous amount of profitable cargo flying, and JAL would augment that quite nicely. KAL and JAL already have extensive business relationships including lots of code sharing and ground tie-ups (handling, catering, maintenance, etc.) Their IT and frequent flyer programs would combine well if they decided to do some cost sharing in that area.
ICN is a very advantageous hub. It's sort of the Minneapolis of Asia. KAL also does a tremendous amount of profitable cargo flying, and JAL would augment that quite nicely. KAL and JAL already have extensive business relationships including lots of code sharing and ground tie-ups (handling, catering, maintenance, etc.) Their IT and frequent flyer programs would combine well if they decided to do some cost sharing in that area.