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Qantas-JAL Codeshare

Macquarie: Qantas may keep JAL codeshare even if JAL defects

Robert Fenner  Jan 14, 2010

Qantas Airways Ltd., Australia’s biggest carrier, may keep codeshare arrangements with Japan Airlines Corp. even if the carrier defects to the rival SkyTeam airline alliance, according to analysts at Macquarie Group Ltd.

Qantas shares common flight numbers with airlines such as Air France-KLM, a member of SkyTeam, and similar arrangements may be kept if Tokyo-based Japan Air leaves their Oneworld coalition, analysts led by Russell Shaw said in a client note.

Delta Air Lines Inc., the world’s largest carrier, is wooing Japan Air to SkyTeam amid speculation the airline will enter bankruptcy. Flights between Japan and Australia represent about 6 percent of Qantas’ available capacity and the route is “material” to the company, Macquarie said.

“Qantas currently enjoys a longstanding codeshare arrangement with Japan Airlines, and would be eager to maintain this regardless of JAL’s future allegiance,” Shaw wrote in the Jan. 12 report. Qantas is still likely to maintain the status quo, he wrote, affirming his “outperform” rating on the Sydney-based airline.

Qantas shares rose 1 cent, or 0.3 percent, to A$2.95 at the close of trading in Sydney. The stock rose 14 percent last year.

Airline Alliances

Olivia Wirth, a spokeswoman for Qantas, declined to comment on the analyst report.

Japan Airlines, Asia’s biggest carrier, may enter bankruptcy after Prime Minister Yukio Hatoyama yesterday said shareholders should take responsibility “in general” for the airline, which has been bailed out at least three times in nine years.

Any defection to SkyTeam would be a “major dent” in Oneworld, leaving it as the smallest of the three global associations that also includes Star Alliance, Shaw said.

AMR Corp.’s American Airlines, part of Oneworld, and private-equity firm TPG have offered to invest $1.1 billion in Japan Airlines as part of efforts to retain the carrier in the alliance while Qantas may help it establish a low-cost carrier.

Delta and its SkyTeam partners have offered to invest $1 billion to bring it to Oneworld.

Macquarie: Qantas may keep JAL codeshare even if JAL defects
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