Japan Airlines expected to file for bankruptcy protection

As Japan Airlines (JAL) prepares to file for bankruptcy protection most likely within the day, it is also said to be making plans to tie up with Delta Airlines, which means leaving the oneworld airline alliance for Skyteam where Delta is a member. Target date for this to happen is 2011.

Company sources say that although JAL president Haruka Nishimatsu will step down after the bankruptcy protection announcement, other board members will formalise the deal with Delta.

State-backed Enterprise Turnaround Initiative Corporation, overseeing the rehabilitation, has been pushing vigorously for JAL to team up with the US’ largest carrier. It believes the partnership will produce 17.2 billion yen (US$189.4 million) annually for the loss-making JAL. Compared with the 5.4 billion yen (US$59 million) in projected profits from a tie up proposed by American Airlines, JAL’s current oneworld teamember, the disparity is wide.

JAL and Delta are expected to file for anti-trust immunity with the US Department of Transportation so they can jointly operate trans-Pacific services.

Delta has offered to shoulder up to 30 yen billion (US$334 million) of the expenses JAL would incur for exiting oneworld and switching to the SkyTeam alliance.

For more on JAL, visit www.jal.com.jp

Margie T Logarta


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