Delta CEO pushes Japan Airlines deal

Atlanta-based Delta and its SkyTeam alliance are trying to lure JAL away from its marketing alliance with American Airlines. They are offering $1 billion in financial assistance to JAL as it restructures.

“We are No. 1 between Japan and Europe. We’re No. 1 between Japan and the U.S.,” Anderson said. “There’s no doubt that Delta and SkyTeam are the strongest partners for Japan Airlines.”

Anderson said Delta, which recently merged with trans-Pacific power Northwest Airlines, carries about 7,500 passengers daily between the United States and Japan, while American and JAL carry fewer than 1,400 daily.

If JAL joined SkyTeam, Delta and other members carriers could offer seats on JAL flights, as well as carry passengers booked by JAL on theirs. Such alliances aim to cement flier loyalties and share in the revenue they generate.

Standard & Poor’s Ratings Services on Friday said Delta and SkyTeam’s proposal to JAL -- including $500 million of capital from SkyTeam, a $300 million revenue guarantee and $200 million of asset-backed funding -- would not affect Delta’s credit ratings or outlook.

However, S&P said that once an “Open Skies” U.S.-Japan aviation treaty is completed, antitrust immunity for Delta and JAL “could prove more challenging than a similar request from American and JAL” because Delta now has authority to fly routes to and beyond Japan, while American does not.

Antitrust immunity enables airline marketing partners to move beyond simple marketing ties and coordinate on pricing and services.

Anderson downplayed the risk that a Delta-JAL deal would not gain antitrust immunity.

“The DOT has approved every antitrust immunity it’s received,” Anderson said. “We shouldn’t be discussing the regulatory issues, we ought to be discussing long-term commercial, underlying business.”

American said it has its own “value proposition” to JAL , calling it “superior in every way.” American said it is confident its partnership with JAL can get antitrust immunity.

The Air Line Pilots Association at Delta backs the SkyTeam-JAL deal. Union chairman Lee Moak this week said the deal would help “enhance the job security and long-term career prospects of our pilots.”

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