JAPAN: Major Alliances Vie for Control of Struggling Japan Airlines

 

With Japan Airlines on the brink of bankruptcy, speculation abounds as to which major airline alliance will gain control of the carrier.

Japan Airlines (JAL) is currently a member of the Oneworld alliance, which is made up of 10 other carriers including American Airlines, British Airways and Qantas. But with its future up in the air, JAL could defect to the rival SkyTeam alliance, comprised of nine members including Delta, Air France, and Korean Air.

As Asia’s largest carrier, JAL represents a coveted prize to whichever alliance can gain control. Keep reading to find out how each side is vying for the upper-hand.
The SkyTeam alliance members have made an offer worth $1 billion to lure the struggling carrier away from Oneworld.

In response, the Oneworld alliance said last month that it would invest $1.1 billion to keep JAL on board. As a last ditch effort, Oneworld recently upped the ante to $1.4 billion.

Industry insiders say that all signs point to JAL switching camps to the SkyTeam alliance, but it will likely be a while before a final decision is reached.

Regardless of which alliance the carrier ends up with, it appears likely that the airline will declare bankruptcy and enter into a restructuring phase that would include cutting 16,000 jobs. JAL would continue flying while under court bankruptcy protection.

The carrier has chalked its struggles up to the global financial crisis, citing a steep decline in business passengers on international flights.

By Dan Bence for PeterGreenberg.com.

Related Links: Reuters, The Times (UK), BusinessWeek

Link to Original Article on PeterGreenberg.com