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American offers to make JAL its exclusive partner

American Airlines has offered to make Japan Airlines (JAL) its exclusive partner in north-east Asia in a bid to persuade the struggling carrier to stay on in the Oneworld alliance.

"This is our focus, we are not going to try to connect traffic with other partners," says American Airlines CEO Gerard Arpey.

Arpey and other American executives are in Tokyo to meet Transport Minister Seiji Maehara and JAL officials in a continuing effort to persuade JAL to remain in Oneworld.

Delta and members of the SkyTeam alliance have offered a $1 billion financing package to struggling JAL to persuade it to switch alliances.

American and its partner TPG have countered with a $1.1 billion offer to convince JAL to stay on.

A partnership with Delta, which already has hubs in Japan and Korea, will not be beneficial for JAL, says Arpey.

"They (Delta) don't need JAL to be successful," he says.

A JAL-Delta partnership will also make a "mockery" of the recently concluded open skies agreement between Japan and the USA, adds Arpey.

American will "object stridently against non-competitive behaviour" if JAL partners Delta and applies for anti-trust immunity, he says.

"As a non-incumbent carrier that has been trying to fight in this market for 25 years, the idea of the incumbent carrier partnering with the leading Japanese airline will turn the open skies agreement into a mockery," adds Arpey.

Calling the meeting with Maehara "constructive", Arpey says American explained that its proposal offers JAL "the best, most achievable path to success".

The USA and Japan recently concluded an open skies pact, which will liberalise air services between the two countries and allow carriers from both countries to work together.

"JAL and American Airlines can readily obtain anti-trust immunity from the US Department of Transport, which will bring in hundreds of millions of dollars for JAL. We are confident this is not an option with other alliances," says Arpey.

JAL's competitor All Nippon Airways has indicated it will apply for anti-trust immunity with Star Alliance partners Continental Airlines and United Airlines.

"JAL must act quickly or risk losing ground," says Arpey.

JAL posted a fiscal second quarter net loss of ¥32.1 and has applied to the government-backed Enterprise Turnaround Initiative Corporation of Japan (ETIC) for a bail-out.

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