JAL Seeks Cash Infusion from Delta, American

tonyw

Well-Known Member
Somehow, it just strikes me as total desperation when you're seeking funding from companies that are not exactly sitting in a cash rich position.

http://www.nytimes.com/2009/09/15/business/global/15air.html

TOKYO — A last-ditch effort by the biggest airline in Japan to raise money and avoid bankruptcy has set the stage for a battle between Delta and American Airlines.

In events that would have been unimaginable a year ago, Japan Airlines, the country’s flagship carrier, said Monday that it was exploring all options to stay in business. News reports said that the carrier was in talks with Delta Air Lines and American over a possible cash infusion of several hundred million dollars.

Despite troubles back home, United States airlines are eager to expand abroad to tap into international business travel, the most consistently lucrative segment in an industry prone to sharp downturns. Still, equity ties between airlines in different countries are rare, with most carriers settling for looser alliances like code sharing on flights.

 
Somehow, it just strikes me as total desperation when you're seeking funding from companies that are not exactly sitting in a cash rich position.

http://www.nytimes.com/2009/09/15/business/global/15air.html

TOKYO — A last-ditch effort by the biggest airline in Japan to raise money and avoid bankruptcy has set the stage for a battle between Delta and American Airlines.

In events that would have been unimaginable a year ago, Japan Airlines, the country’s flagship carrier, said Monday that it was exploring all options to stay in business. News reports said that the carrier was in talks with Delta Air Lines and American over a possible cash infusion of several hundred million dollars.

Despite troubles back home, United States airlines are eager to expand abroad to tap into international business travel, the most consistently lucrative segment in an industry prone to sharp downturns. Still, equity ties between airlines in different countries are rare, with most carriers settling for looser alliances like code sharing on flights.
Delta has a pretty good cash reserve as well as having AF/KLM to financially back them. Now there is more to this than let on. Delta and American are in a game of chess. Delta wants to be the number one carrier in New York and have publically stated that they have offered to swap DL's BOS terminal for AA's Terminal 6 in JFK which JFK has turned down. DL's back up came through when JFK was able to aquire bonds in order to tear down and totally rebuild Delta's terminal 2,3, and 4. DL would rather have American's JFK terminal than have to deal with demolition and contruction on it's terminals.
Delta has a chance to weaken American by buying a majority stake in JAL and bringing JAL over to Sky Team; which would also weaken the OneWorld Alliance at the same time. American doesn't have a very good cash reserve and is taking a giant gamble by making a counter offer for JAL. If American were to win out over Delta, they would have a severely depleted cash reserve and might be more receptive to Delta's JFK offer for an influx of cash. It's going to be interesting to see how this plays out!:pop:
 
If they're so flush with cash, Delta needs to start giving back the wage concessions they strongarmed their workforce for after 9/11.
 
Funny, JAL just absorbed NCA, inheriting 8 747-400Fs.

It'll be interesting how this plays out.
 
Eh, all Delta would have to do is furlough the rest of the pilots & FAs at Comair. Easy.



:sarcasm:
 
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