American Airlines, partners offer US$1.1 bln to JAL

TOKYO: Struggling Japan Airlines was offered a US$1.1 billion lifeline Thursday from partners led by American Airlines, amid a bidding war with Delta Air Lines for a piece of Asia’s biggest carrier.JAL, which last month reported its fourth straight quarterly loss, has been hovering on the brink of bankruptcy in a crisis blamed on the global aviation industry downturn, mismanagement and its huge pension obligations.  The recipient of three government bailouts since 2001, the airline has said it plans thousands of job cuts and a drastic reduction in routes.

It is seeking more public funds as it restructures under the supervision of a government-backed turn-around body.

American Airlines and Delta Air Lines have both sought a stake in JAL, hoping to expand their Asian operations ahead of an Open Skies agreement expected to be signed soon between Washington and Tokyo.

At a Tokyo press conference, American Airlines, the oneworld alliance — which now groups American and JAL with nine other major airlines — and private equity company TPG pitched their offer.

“As part of a comprehensive restruct-uring American/oneworld and TPG are prepared to invest up to US$1.1 billion … in JAL to bolster its financial foundation for the near and long term,” they said in a statement.

“American is prepared to make a substantial commitment as part of the investment,” the airline’s chief financial officer Tom Horton said, without specifying what would be the airline’s exact contribution. — AFP

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