JAL set to announce alliance decision today

This story is sourced from Pro
See more Pro news »

Japan Airlines (JAL) is set to make an announcement today about its alliance partnership, with news reports in Japan saying that it is likely to stay with the American Airlines-led Oneworld.

The move will be a blow to Delta Air Lines and the SkyTeam alliance, which had hoped to woo beleaguered JAL after offering more than $1 billion in capital and incentives to the carrier. American and other Oneworld carriers had offered about $1.4 billion in incentives to entice JAL to stay.

"There will be an announcement later today about a significant issue," says a source close to the discussions. The source confirms that the announcement relates to a choice of partners. A JAL spokeswoman declined to comment, while spokesmen for Delta and American could not be contacted.

The US carriers are keen to partner JAL to take advantage of a US-Japan open skies deal, and to benefit from the Japanese carrier's vast Asian network. Staying with Oneworld, however, would mean that JAL is unlikely to incur the high costs of switching alliances and forming new partnerships at a time when it needs to restructure its operations.

JAL filed for bankruptcy protection on 19 January after posting a fiscal second quarter net loss of ¥32.1 billion ($358 billion), and incurring debts of ¥2.3 trillion. The Japanese government has pledged up to ¥900 billion to help JAL restructure its operations, but has also forced the carrier to replace its CEO and revamp its management team.