Carriers seek to boost Asia market share
American Airlines and Delta Air Lines are both in talks with JAL about investing in the loss making Japanese carrier.
Delta, the largest carrier in the world since its merger with Northwest Airlines, and American are both looking to increase their revenue from the Asian market.
American also wants to stop JAL, a fellow member of the oneworld alliance, from switching to the rival SkyTeam group of which Delta is a leading member.
One analyst said that if JAL, Asia's largest airline by revenue, moved to SkyTeam, it would leave American and oneworld members like BA "totally left out" of the Japanese market.
JAL announced a loss of around $1bn in the quarter ending June 30 and is heading for an annual loss of about $700m for its financial year ending next March.
The airline secured a $1.1bn loan from the Japanese government in June. But reports in Japan say it may need to raise a further $2.8bn through equity and debt financing.
JAL also has problems with its pension scheme with plans to cut pension payments expected to be opposed by former and retiring staff.
Reports in Japan said that American is seeking a joint venture with JAL as well as investing in the airline while Delta was aiming to invest a reported $300m and sign a codeshare deal.
Since its merger with Northwest, Delta already has a hub at Narita, Tokyo's major international airport, from where it operates 21 international routes, mostly to the US.
A codeshare deal would allow it to sell seats for JAL flights form Japan.
American wants to increase its revenue from the Japan market but is also desperate, analysts said, to stop JAL going to SkyTeam.
Reuters quoted one analyst Yoshihisa Miyamoto of Okasan Securities as saying: "American will be totally left out if JAL decides to join hands with Delta because ANA (Japan's second largest carrier) is already a Star Alliance member.
"Considering how desperate American is, it's likely that they'll offer more than what Delta has been reported as ready to spend."
A deal with either US carrier could help open up the Japanese market. The US and Japanese government are currently in talks over an proposed "Open Skies" deal while the new Japanese Democratic Party government has promised to reduce airport fees to stimulate business.
Both Delta and American declined to comment on any talks with JAL.
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