Japan Airlines is to maintain its business relationship with American Airlines and the oneworld alliance after it emerges from state-sponsored restructuring, spurning a rival offer to tie-up with Delta Airlines and the SkyTeam alliance.
The announcement comes as JAL undergoes a government-sponsored restructuring following its filing for bankruptcy protection last month.
The move will be seen as a huge boost for AA, which had been locked in an intense battle with arch rival Delta to snare the Japanese carrier. Prior to JAL’s bankruptcy the two airlines had entering a bidding war worth hundreds of millions of dollars.
AA will now be able to maintain its principal Asian partner, as well as build links in the region following the agreement in December between the US and Japan to liberalise air traffic. The “open skies” deal will remove many of the legislative hurdles to operating flights between the US and Japan. This will also allow airlines from both countries to have a wider range of destinations and routes to choose from.
JAL currently links AA passengers to China and other fast-growing markets in the region through its hub in Tokyo.
An alliance with Delta was favoured by Japan’s transport ministry, as the Atlanta-based airline already has hubs in Tokyo and Seoul, unlike the more Atlantic-focused American.
Japan’s only other big carrier, All Nippon Airways, is already partnered with Untied Airlines in the Star alliance.
Under its restructuring plan, JAL is to cut 15,700 jobs, or a third of its workforce, sell dozens of non-core businesses and demand that creditors write off Y730bn of its more than Y2,300bn of gross interest-bearing debt.
American had warned JAL that switching alliances would alarm US anti-trust authorities, given Delta’s already large share of US-Japan passenger traffic.
AA has proposed creating a joint venture with JAL to co-operate more closely on pricing, schedules and other operational matters, a step that would require a grant of immunity from normal anti-trust rules.