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Old Jan 16, 2010, 10:35 pm
  #1  
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Thumbs up JAL in ST?

http://www.channelnewsasia.com/stori...031112/1/.html


JAL, Delta reach deal over tie-up
Posted: 16 January 2010 1325 hrs


TOKYO: Japan Airlines has reached an agreement on a tie-up with Delta Air Lines as the troubled Japanese carrier readies for a court-led rehabilitation, according to a newspaper.

The two companies are likely officially to sign the deal, which will allow them to run code-share flights, as soon as JAL's new management endorses it, the Yomiuri Shimbun said on Saturday, quoting company sources.

The agreement means Asia's biggest airline will switch from the Oneworld alliance to the SkyTeam group, to which Delta belongs.

JAL and Delta will ask US authorities for antitrust immunity by mid-February, the paper said. If the request is accepted, the two firms will be able to run combined flights over their Pacific routes in what amounts to business integration.

The report came after American Airlines and its partners lifted their proposed investment in JAL to US$1.4 billion, from a previous offer of US$1.1 billion in a bidding war with rival Delta for a stake in JAL.

On Friday, Japan's government said it would announce a restructuring package for JAL on January 19, when the troubled carrier is widely expected to file for bankruptcy protection.

JAL is believed to be on the verge of seeking court protection from creditors and delisting its shares from the Tokyo Stock Exchange to make it easier to restructure its debt and slash costs.

JAL, which lost about US$1.5 billion in the six months to September, is seeking public aid in the face of mounting debts. JAL is reportedly set to slash more than 15,000 jobs and sell non-core assets such as hotels.

- AFP/yb
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Old Jan 17, 2010, 10:51 am
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That would be good news but IMO it is too early to be optimistic.
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Old Jan 18, 2010, 8:15 am
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that will be good news indeed
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Old Jan 19, 2010, 8:47 pm
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When I saw it from one of the Japanese news agencies a week or two ago it said that the government led restructering team said to partner with Delta and that they would be joining Skyteam early next year.

The bankruptcy happened in Tokyo yesterday so we'll have to see how things shape up, but that's certainly the expectation.
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Old Jan 22, 2010, 1:05 pm
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Merger is true and happening very soon

Likely to Join Skyteam: A Big Win for Stakeholders 15 comments
by: Vaughn Cordle January 17, 2010 | about: UAUA / LCC / CAL / DAL / JALSF.PK / AMR
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Reports from various sources are that JAL (JALSF.PK) will officially sign the deal after it is finally endorsed by new JAL top management that will be inaugurated after the JAL group applies for the application of the Corporate Rehabilitation Law. This could happen perhaps as early as this week. It's interesting to note that the Enterprise Turnaround Inititive Corp of Japan (ETIC) is estimating the annual benefits of joining Delta (DAL) and Skyteam to be 17.2 billion yen, or $189 million U.S.

I initially roughed out a $300 million opportunity-cost for JAL if they did not join DAL and included the analysis in a research note to clients in late October last year. Delta's later estimate, if I recall, was in the $400 million range.

The lower number estimated by ETIC takes into account that the airline will be 30% smaller by 2012 and after the restructuring. Interestingly, our initial "first cut" estimate of $210 million, when size adjusted [$300 X .70], is fairly close to the ETIC’s $189 million.

Delta's $280 ($400 x .70) appears to be on the high side but I suspect that the ETIC number underestimates the value of the fully developed alliance benefits. We estimated a 2% net benefit as a percent of revenue, while the ETIC is estimating a 1.3% benefit.

The numbers are based on a top-down estimate based on the different sizes of the alliance networks and can be reasonably supported - qualitatively and quantitatively - when presented to JAL stakeholders. The initial estimates were close enough to make the business case that JAL would likely switch to Delta and Skyteam. Interestingly, very few believed that JAL would leave AMR (AMR) and the OneWorld alliance.

The open-ended question is whether or not the DOT (with DOJ input) will grant anti-trust immunity (ATI) to a joint venture between JAL/DAL/AF. We assume that the DOT will grant ATI for the UAL/CAL/ANA joint venture.

The JAL/AMR/BA joint venture ATI is easier granted because it retains a higher level of competition between the three alliances in the Japanese and U.S. markets. However, I don't buy the AMR argument that JAL will not get anti-trust immunity (ATI) for a joint venture because Skyteam ends up with nearly 60% of the market between the U.S. and Japan.

AMR's core argument is that the DOT will not grant ATI for a JAL/DAL/AF joint venture and that the JAL risks losing a $2 billion package from AMR and OneWorld members. The threat of losing $2 billion in economic benefits is not that important, and may not be required, given a proper restructuring and adequate capital from the ETIC.

The risk to the U.S. and Japanese consumer is that the Japanese government will not agree to Open Skies if the U.S. government does not grant ATI to JAL/DAL/AF.

Clearly having three roughly equal alliances competing in the U.S., the Japanese markets is preferable to two large ones and a small one. However, if the choice is between not having an Open Skies agreement and a lop-sided competitive market, where Star and SkyTeam dominate a much smaller OneWorld, I suspect that the U.S. government will go with the choice that provides the greatest consumer benefit. In other words, an Open Skies agreement is a more important objective than maintaining an optimal balance of competition between three competing alliances that are roughly equal.

Given the importance of Open Skies with Japan, I'm of the opinion that the U.S. will eventually grant ATI immunity to a JAL/DAL/AF joint venture, even if the final result is not an optimal balance of competition between the three alliances in the Pacific.

The DOT is, in theory at least, a non-political entity that focuses exclusively on competitive issues and what's best for the consumer. However, DOT Secretary LaHood works for Obama; therefore, politics is always part of the equation to some degree or another. I suspect this is more so the case with the current Congress and White House.

The bottom line: The U.S. will not want to lose an opportunity to open up one of the most restrictive and largest markets in the world.

The approval process may be contentious and drawn out, but if the Japanese government insists that U.S. ATI approval for a joint venture between JAL/DAL/AF is a condition of Open Skies, the U.S. clearly will be forced to choose which option works best for the consumer. AMR is clearly the loser in this scenario and will end up with only a 6-8% market share in the Japan-U.S. market.

If the DOT/DOJ refuses to grant ATI to JAL/DAL/AF, Delta and JAL still win because important gates and slots in Japan will remain closed to competition. The incumbents are better off without enhanced competition that results in a more open, competitive market between the two countries.
The following is from the Joint Application of All Nippon Airways, Continental Airlines and United Airlines that was filed before the DOT on December 2009:

Open Skies, which is linked to the granting of antitrust immunity to the Joint Applicants will bring substantial benefits to U.S. - Japan air travelers and shippers, includes:

o the freedom for airlines of both countries to operate more flights;
o a wider range of service options at a lower price;
o the freedom for airlines to price services in response to consumer demand without government interference;
o more intense competition among airlines and alliances operating U.S.-Japan/Asia service;
o expansion of the number of U.S. carrier slots at Tokyo's Narita Airport and new access to Tokyo's Haneda Airport for U.S. carriers; and
o the opportunity for airlines to form metal-neutral joint ventures that can be immunized from U.S. antitrust laws.

In recent antitrust-immunity cases, the DOT has approved applications where joint applicants held a larger share of service in the affected regions than ANA / Continental (CAL) / United's (UAUA) combined share of U.S.-Asia service
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Old Feb 7, 2010, 2:41 pm
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How quickly fortunes change

Of course, nothing is official, until an official announcement


From Reuters

JAL to stay with American, end Delta talks: report


The two U.S. carriers have been courting Japan Airlines for months with offers of financial aid and close cooperation on international routes, looking to gain access to its vast network in Asia and benefit from the expansion at Tokyo's Haneda Airport.

JAL had been leaning toward joining hands with Delta before filing for bankruptcy last month and bringing in new management under the auspices of a state-backed fund, the Enterprise Turnaround Initiative Corp of Japan (ETIC).

JAL's new chief executive officer, Kazuo Inamori, and officials of the ETIC have decided that switching alliances is too risky and could hinder their ability to turn around the airline quickly, the Asahi said on its website.

JAL will make an official announcement this week, the Asahi said. A JAL spokeswoman declined to comment. No one at the ETIC could be reached for a comment.

In addition to the burden of upgrading computer systems and other costs, the risk that JAL and Delta would not be able to receive regulatory approval for anti-trust immunity also played into the decision, the Asahi said.

Anti-trust immunity allows airlines to work closely on pricing, flight scheduling and in other areas to boost revenue and lower costs. This is now a possible under the "open skies" treaty recently agreed to by the United States and Japan.

American and its Oneworld partners have offered $1.4 billion in capital and Delta has offered about $1 billion in financial aid in an effort to woo JAL. However, the ETIC is not expected to invite another carrier to invest in JAL at this stage.


http://www.reuters.com/article/idUSTRE6161PA20100207
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Old Feb 9, 2010, 9:08 am
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Originally Posted by ferd57
Of course, nothing is official, until an official announcement
That official announcement came today:

Japan Airlines and American Airlines Strengthen Partnership and Apply for Approval of Antitrust Immunity
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Old Feb 9, 2010, 2:58 pm
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However, many analysts believe that Delta would have been the wiser choice and offer long term benefits and I agree with them. Delta connects Japan with 10 American Cities wheras American only 4 and would have been able to assist JAL with its international routes. I just find Delta a more secure international carrier when comparing to American even over the Pacific where Delta has to operate its own aircraft when connecting from Narita to various Asian cities.

http://www.reuters.com/article/idUSTRE61827S20100209
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Old Feb 10, 2010, 12:42 pm
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Smile Poor old Skyteam - always the bridesmaid, never the bride!

Of course this does serve to highlight the fact that Skyteam always has been (and probably always will be) the weakest and least glamorous of the three main alliances.

Oneworld attracts the premium 'flag carrying' airlines (hence why JAL stays), Star Alliance gives the best coverage for the greatest percent of the world's population, and Skyteam is a bit of an embarrassing rag bag of the worst of the regions where it has representation. Delta is a laughing stock (just read the Delta FT forum), AirFrance/KLM/Alitalia are definitely 'second tier' and as for the rest - Aeroflot, KAL, Aeromexico, Czech....need I say more. I rejoiced the day Continental were released from 'the team' and joined a proper alliance. Well done to JAL and long may Oneworld continue to flourish!
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Old Feb 12, 2010, 2:18 am
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Originally Posted by bos2gla
Of course this does serve to highlight the fact that Skyteam always has been (and probably always will be) the weakest and least glamorous of the three main alliances.

Oneworld attracts the premium 'flag carrying' airlines (hence why JAL stays), Star Alliance gives the best coverage for the greatest percent of the world's population, and Skyteam is a bit of an embarrassing rag bag of the worst of the regions where it has representation. Delta is a laughing stock (just read the Delta FT forum), AirFrance/KLM/Alitalia are definitely 'second tier' and as for the rest - Aeroflot, KAL, Aeromexico, Czech....need I say more. I rejoiced the day Continental were released from 'the team' and joined a proper alliance. Well done to JAL and long may Oneworld continue to flourish!
+1. Totally agree with your view. oneworld emphasizes on quality.
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Old Feb 13, 2010, 7:13 pm
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Originally Posted by bos2gla
Of course this does serve to highlight the fact that Skyteam always has been (and probably always will be) the weakest and least glamorous of the three main alliances.

Oneworld attracts the premium 'flag carrying' airlines (hence why JAL stays), Star Alliance gives the best coverage for the greatest percent of the world's population, and Skyteam is a bit of an embarrassing rag bag of the worst of the regions where it has representation. Delta is a laughing stock (just read the Delta FT forum), AirFrance/KLM/Alitalia are definitely 'second tier' and as for the rest - Aeroflot, KAL, Aeromexico, Czech....need I say more. I rejoiced the day Continental were released from 'the team' and joined a proper alliance. Well done to JAL and long may Oneworld continue to flourish!
Oh yes Iberia and AA are really premium airlines, and the fact that you call Air France and KLM second tier airlines makes me laugh even more.
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Old Feb 14, 2010, 12:02 am
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Originally Posted by sh1982
...the fact that you call Air France and KLM second tier airlines makes me laugh even more.
quality wise yes, they are definitely second tier, and KLM has even steadily worsened their offer since being gobbled by AF. But I see many and many happily confuse dimensions for quality and choices
As always however is a matter of personal preferences. No need to get irked if your pet airline is mistreated somewhere, just get along.
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Old Feb 14, 2010, 5:40 am
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Thumbs up

Looks like JAL will be staying with Oneworld, well done. Its best for JAL to stay with their long time partner AA. JAl rejects DL offer and decided to stay with AA and Oneworld. Right now AA and JL are requesting for joint ANTITRUST IMMUNITY. I wish them luck.

http://www.dallasnews.com/sharedcont...1.3cebc32.html

American Airlines Inc. and Japan Airlines International Co. asked regulators Friday to grant them antitrust immunity so they can work more closely on U.S.-Asia flights.
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Old Feb 14, 2010, 5:46 pm
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Originally Posted by CXBA
quality wise yes, they are definitely second tier, and KLM has even steadily worsened their offer since being gobbled by AF. But I see many and many happily confuse dimensions for quality and choices
As always however is a matter of personal preferences. No need to get irked if your pet airline is mistreated somewhere, just get along.
First of all i dont have a "pet" airline. I usually just fly whatever is the most conviant for me not if a certain airline is in a certain alliance or not.And since i live in Amsterdam that usually are airlines from SKY or *A.And i actually think AF is the best european airline for travelling long houl in regards to service meals etc and overall there is not even that much difference in service between lets says AF or LH but AF just has that little extra usually.Overall in y class there is not much difference between AF,BA or LH they are all just oke and far far away from SQ,KE or CX, that it the point i am trying to make.
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Old Feb 20, 2010, 12:11 am
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Originally Posted by sh1982
First of all i dont have a "pet" airline. I usually just fly whatever is the most conviant for me not if a certain airline is in a certain alliance or not.And since i live in Amsterdam that usually are airlines from SKY or *A.And i actually think AF is the best european airline for travelling long houl in regards to service meals etc and overall there is not even that much difference in service between lets says AF or LH but AF just has that little extra usually.Overall in y class there is not much difference between AF,BA or LH they are all just oke and far far away from SQ,KE or CX, that it the point i am trying to make.
On long haul, the other major European airline, BA will give you flat beds in J. AF is still not there. So I do see a big difference and it is in favor on Oneworld. Furthermore, when you are a Oneworld Emerald you get access to F lounge. On ST, Elite plus gives you the business class lounge access and from AF, it is usually with a very non-friendly attitude! Finally KE, the ST alliance Asian partner is hardly at the level of CX or JL. In short, Skyteam is hardly the best alliance!
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