American eyes look west for arranged marriages

After years of transatlantic alliance and joint venture attention from the US majors – Northwest-KLM, AA-BA, BA-US Airways, Air France-KLM/Delta – the big news over the weekend is that their gaze is now looking the other way.

It emerged this weekend that first Delta Air Lines and then American Airlines were in talks with struggling Japan Airlines over a possible investment and joint venture.

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An alliance with Asia’s largest airline group is clearly a major prize for whichever lands the deal, if it goes ahead. JAL has revenues of $19 billion a year compared to Qantas in second place in the revenue size game in Asia with $14 billion.

It’s probably a good time to be wooing JAL. It is losing bucketloads of money and has found it hard to make the structural changes a legacy carrier needs to make to become profitable.

That said, it is not clear how US investment would make that any easier.

But when it comes to transpacific operations a tie-up between either carrier would make them a dominant player in that market.

Regulators and competitors will already be sharpening their arguments for and against.

It’s going to be a fascinating week to see how this one develops. 

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2 Responses to American eyes look west for arranged marriages

  1. petra 16 September, 2009 at 12:24 pm #

    Delta Air Lines and American Airlines are not the only two companies who are interested in JAL – i have read that also Air France/KLM is really interested in Japan Airlines. Dont know any details but I think it is true

  2. Mark Pilling 16 September, 2009 at 1:58 pm #

    Thanks for the comment Petra. We’ve seen Air France-KLM mentioned in dispatches as well, but at present all I can is is “sources” and “people familiar with the situation” being quoted.

    We are still waiting to see some more concrete information but the tone of the press reporting seems to suggest there is substance to this flurry of activity.

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