"Best chance for stable future" airline told
The ceos of airlines in the oneworld alliance today (December 3) called on Japan Airlines (JAL) not to defect to a rival group.
In a declaration, they said oneworld gave the struggling Asian carrier "the best chance for a stable and successful future".
It offered JAL $1.8bn investment and promised "increased revenue" if it stayed with oneworld.
The support comes after rival alliance SkyTeam offered the loss making airline a $1bn package to join it.
The offer included $500m in capital, $320m in revenue guarantees and transition costs and $200m is asset -backed financing.
Oneworld said its offer "outstrips by threefold any other offer to lure JAL away".
It said the key elements of its package were $1.1bn for restructuring and an anti-trust immunity joint venture across the Pacific with American Airlines, one of the leading members of oneworld.
The cash for restructuring JAL which is planning to make redundancies and axe routes, is through a link with the TPG investment group, oneworld said.
It said TPG offered JAL and the Japanese Government which is providing loans for the airline, with "far wider funding resources than would be available through any other airline grouping".
Oneworld said the application for ATI could be lodged as soon as the US and Japanese governments sign an "Open Skies" agreement.
A joint venture could add $100m to JAL's revenue on top of the £500m it already gets from being a oneworld member.
Gerard Arpey, ceo of American and chair of oneworld's governing board, said: "The oneworld alliance already has a significant investment in the success of Japan Airlines, and we are prepared to do even more to ensure that American, oneworld and JAL have a successful partnership for the long-term.
"We believe this in turn will allow JAL to produce significant benefits for all of its stakeholders - the travelling public, employees and investors, and certainly the Japanese tourism and aviation industries.
"The total alliance proposition developed by American Airlines, as JAL's biggest partner, our fellow members of oneworld and our financial partners TPG is very clearly vastly superior in every aspect to anything anyone else is offering.
"When you add up the facts, the most value and best long-term solution for JAL comes from remaining with oneworld so that it can continue to focus with partners on building a stronger foundation for the future."
JAL secured a loan late last month of €1.34bn (JPY180bn) from the Development Bank of Japan after it had called on staff and ex-employees to take a 40% cut in their pensions.
The 17,000 staff and 9,000 pensioners were told by the airline management that it faced bankruptcy if payments were not cut.
The airline's pension fund currently has a deficit of €2.49bn (JPY330bn).
JAL lost $692m last year and announced a $1bn loss for the quarter to June this year.
It is heading for a deficit of $700m for the financial year ending next March.
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