Tulsa World: AA tries to keep JAL Corp. on board

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AA tries to keep JAL Corp. on board

A Japan Airlines jet taxis near an American Airlines plane at Narita Airport in Chiba prefecture, Japan. Delta Air Lines Inc. is trying to lure JAL away from American's global alliance of airlines, called oneworld. Delta belongs to a rival alliance called SkyTeam. Haruyoshi Yamaguchi / Bloomberg News

By DAVID KOENIG Associated Press
Published: 11/10/2009 2:24 AM
Last Modified: 11/10/2009 8:48 AM

DALLAS — The CEO of American Airlines is putting pressure on Japan Airlines to keep its alliance with American and ignore a competing bid from Delta Air Lines Inc.

Gerard Arpey has told his own executives that it "would be a very bad idea for Japan Airlines" to side with Delta.

And if JAL jumps to Delta's side, "that would certainly be very bad for us," Arpey told American executives at a meeting last month.

Later Monday, Arpey was expected to make public remarks about the bidding war for JAL's alliance during an event in Mexico City.

Delta, which supplanted American's parent, AMR Corp., as the world's largest airline operator with last year's purchase of Northwest, is now trying to lure JAL away from American's alliance of global airlines, called oneworld. Delta belongs to a rival alliance called SkyTeam.

Japan Airlines is in deep financial trouble, and it's seeking government help and an injection of capital to avoid collapse. It has begun cutting routes to save cash.

Delta and American covet JAL because of its extensive routes in Japan and China. By having JAL as a partner since the mid-1990s, American has been able to sell those routes to its own customers and share in the revenue. American and JAL offer reciprocal frequent-flier privileges to each other's passengers.

Arpey said the deal has been good for JAL, by feeding American passengers to connecting flights in Tokyo.

"We are taking a lot of business from somebody ... we're doing that

at the expense of either United or Delta-Northwest," he told his executives at a meeting in Dallas. American officials provided a transcript of his comments.

American officials say they have proposed to deepen their partnership with JAL. American wants to seek antitrust immunity so the two airlines can work together on setting prices and schedules. Such an arrangement hinges on the United States and Japan agreeing on a treaty to reduce aviation barriers.

Last week, Kenji Hashimoto, AMR's vice president of alliances, said if JAL switches from oneworld, it would lose up to $500 million in lost revenue over two years until the changeover to SkyTeam gets up to speed.

American executives, including Arpey, have also argued that JAL would be less likely to win regulatory approval for antitrust immunity with Delta because Delta's Northwest unit already has a big chunk of the U.S.-Tokyo market.

Arpey and other top American executives have traveled to Japan to meet with JAL representatives, government officials and JAL's bankers. Delta officials, including President Ed Bastian, have made similar visits to Japan to press their case.

American is a unit of AMR Corp. of Fort Worth. By DAVID KOENIG Associated Press

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planespotter, (11/10/2009 4:24:39 PM)

There is no way Skyteam should be allowed to take JAL. Talk about anticompetitive! They already have Korean, China Southern and the Delta/Northwest monster has a ton of slots at Narita.

If regulators want to preserve any sense of fair competition they will start sending signals to Delta that this is off the table.

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