Japan Airlines

Delta offers JAL $1 billion

Image via asiasteps.com

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Delta and its SkyTeam Alliance partners are making a $1 bil offer to lure struggling Japan Airlines from its affiliation with American Airlines.

Delta's offer includes a $500 mil capital investment, $300 mil in short-term revenue guarantees, and $200 mil in asset-backed financing for JAL.

Delta and American are both interested in tapping JAL's extensive routes in Japan and China. American claims that JAL would suffer up to $500 mil in lost revenue over two years if it switches to the SkyTeam Alliance.

JAL is desperate need of cash, having lost $1.5 bil for the first half of this fiscal year while burdened with over $10 bil in debt.

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