Japan Airlines Corp., seeking its fourth state bailout since 2001, resumed talks with Delta Air Lines Inc. and AMR Corp.’s American Airlines over a possible capital alliance, three people familiar with the matter said.
Executives from the two U.S. carriers visited Tokyo in the last two weeks and may return this month, said the people, who declined to be identified because the talks aren’t public. The carrier will also release a revised restructuring plan, drawn up with a state-appointed panel, by month’s end, said a person familiar with the situation.
JAL, Asia’s biggest airline by sales, surged the most in a year in Tokyo trading on optimism it would secure investment and government support, enabling it to avoid collapse. The airline tumbled 30 percent in about three weeks after Japan’s new government rejected the company’s own turnaround proposal.
“There’s no time left for JAL,” said Mitsushige Akino, who manages the equivalent of about $660 million at Tokyo-based Ichiyoshi Investment Management Co. “If the company waits another month, its shares may drop to 50 yen and then it will lose negotiating power.”
JAL halted talks with American and Delta in September as the government task force began work, the three people said. A capital alliance with JAL may boost the U.S. carriers’ access to China, Asia’s biggest air traffic market.
Satoru Tanaka, a JAL spokesman, declined to comment on whether talks had resumed. A Delta spokeswoman, Betsy Talton, said the airline had no comment, and a message left with American’s communications office wasn’t immediately returned.
The five-year turnaround plan aims to raise operating profit to $550 million, said the person, who declined to be identified because the information isn’t public.
The carrier may also pay “tens of billions” of yen to settle pension obligations under the proposal, previously due to be published next month, said the person. The panel is seeking debt-for-equity swaps, forgiveness of loans and new financing from banks, the person said. The funding isn’t dependent on the carrier finding a strategic investor, the person added.
American, a member of the same alliance as JAL, was considering leading other Oneworld carriers in an investment in JAL, people familiar with the plan said last month. Air France-KLM, a SkyTeam carrier alongside Delta, has also held talks on possibly investing in JAL.
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