JAL bankrupt, joining SkyTeam.

[surreal1221]

http://www.aviationweek.com/aw/gene...s/awx/2010/01/19/awx_01_19_2010_p0-197968.xml

Japan Airlines is bankrupt; it filed for protection from creditors under the country’s corporate rehabilitation law on Tuesday.

The government is guaranteeing that the company will continue flying, but a court-supervised reorganization is expected to result in it shrinking. Shareholders’ funds will be eliminated and creditors will have to forgive debt, while the government stumps up cash to recapitalize the airline.

Better-managed rival All Nippon Airways, which has remained solvent amid the same market conditions, says it is highly concerned that government funding for the restructuring will distort competition.

Japan Airlines will cooperate with Delta Air Lines and move to the Skyteam alliance, switching from Oneworld as part of its corporate restructuring, two leading Japanese media organizations report.

The Japanese carrier is expected to apply to the U.S. Transportation Dept. by Feb. 15 to operate transpacific services jointly with Delta regardless of anti-competitive effects, says the Kyodo newswire.

Delta and Japan Airlines reached a basic agreement on the matter on Jan. 15, says the Daily Yomiuri newspaper.

American has offered a similar arrangement to Japan Airlines, but it is far weaker than Delta in this market.

Delta and JAL would together carry about half of the traffic between Japan and the United States, even after sacrifices to satisfy competition authorities. Delta’s current share is 32%, Japan Airlines’ 22% and American’s 8%.

As planned by the government’s restructuring agency, the Enterprise Turnaround Initiative Corp., operating costs at Japan Airlines will fall by 25% over the next three years, says the Nikkei newspaper. Labor costs will fall slightly faster.

 

[MikeD]

Labor costs will fall slightly faster.

Due to a reduction in the labor force?

 

[Firebird2XC]

AMR management is not happy.

They were really bound and determined to get JAL on OneWorld.

Hmm.

 

[CFIscare]

I wonder what this means for AMR. I can't imagine they won't eventually do something to compete with Delta. Anybody smell a merger?

 

[H46Bubba]

Watch for them to cozy up with Alaska and shoot for a merger/aquisition. That would put a big dent in DL's west cost international feed.

 

[Cptnchia]

Watch for them to cozy up with Alaska and shoot for a merger/aquisition. That would put a big dent in DL's west cost international feed.

Once they get past DL's right of first refusal and the poison pill protecting the feed.

 

[PeanuckleCRJ]

Once they get past DL's right of first refusal and the poison pill protecting the feed.

Sucks for them that we've already thought of their next move.

 

[Maximilian_Jenius]

Once they get past DL's right of first refusal and the poison pill protecting the feed.

Sucks for them that we've already thought of their next move.

Is that official, can you confirm it, or is it just a check airman or mechanic rumot?

 

[PeanuckleCRJ]

Is that official, can you confirm it, or is it just a check airman or mechanic rumot?

It's in the Alaska JV.

 

[blee256]

Watch for them to cozy up with Alaska and shoot for a merger/aquisition. That would put a big dent in DL's west cost international feed.

Eagle already does the feed for Delta/NW along with Alaska.

I remember reading an article saying if One World lost JAL, AA would probably pull out of japan.

 

[Maximilian_Jenius]

It's in the Alaska JV.

JV=Joint Venture?

 

[Cptnchia]

JV=Joint Venture?

You are correct. I cannot remember who said it, but when asked about AA going after Alaska and pulling the feed, some suit type was quoted as saying there are protections in place to make it a costly affair.

 

[derg]

"Suit Type" -- I love it!

Like a "Four to Six Weeker"?

"...in four to six weeks, we'll be looking at the 100-seat solution..."