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Japan Airlines

JAL to decline offers from US carriers

Jan 10, 2010

Troubled Japan Airlines Corp. and the state-backed corporate turnaround body responsible for the money-losing airline's restructuring will decline cash offers from Delta and American Airlines, a report said Sunday.

Instead, they will only seek a greater business cooperation with either Delta Air Lines Inc. or American Airlines, the business daily Nikkei said, citing no sources. The turnaround body will pick one of the U.S. carriers as JAL's partner after February, it said.

Delta — the world's biggest airline operator — and its rival American are vying for a stake in Japan Airlines, known as JAL, as they seek to expand their Asian networks.

Delta and its SkyTeam partners have offered $1 billion to JAL, while American, which partners with JAL in the oneworld alliance, has countered with a $1.4 billion.

But the state-backed Enterprise Turnaround Initiative Corp. of Japan fears that giving foreign carriers a stake in the struggling airline could only complicate its restructuring efforts, the Nikkei said.

JAL could file for bankruptcy as early as Jan. 19, Nikkei said Saturday. After the filing, JAL President Haruka Nishimatsu plans to resign.

The Nikkei said Sunday the government and the turnaround body have asked Kazuo Inamori, founder of electronic component maker Kyocera Corp., to head JAL during the restructuring process. Inamori is to reply to the government by the end of the week.

Officials at JAL, the transport ministry and the turnaround body could not be reached for comment Sunday.

Amid bankruptcy fears, shares in JAL continued to tumble, with their closing price falling nearly 12 percent Friday to 67 yen. Friday's finish marked a staggering fall from JAL's closing price of 213 yen at the beginning of 2009.

Japan's financial markets will be closed Monday for a public holiday.

JAL to decline offers from US carriers
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Source: AP

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