American Airlines reaffirms its commitment to JAL; JAL may recieve USD1.1 billion in bridging loans
American Airlines Chairman and CEO Gerard Arpey reaffirmed (09-Nov-2009) the commitment of American Airlines and the oneworld Alliance to retain Japan Airlines (JAL) as a "valued partner and equal member within the oneworld group". Mr Arpey, who also is Chairman of the oneworld Board of Governors, noted that the current global economic environment has affected carriers worldwide, but it has been especially challenging for those operating in the Asia Pacific region. As the Governments of Japan and the United States consider an Open Skies agreement, Mr Arpey noted that JAL is more likely to realise the benefits of an immunised relationship with American Airlines with Mr Arpey adding that, "by remaining with oneworld, JAL can continue to benefit fully from all of the revenues flowing from all its partnerships".[more]
American Airlines: "Let me be very clear. JAL is a highly valued member of oneworld. The alliance and its other member airlines have deep and long-standing partnerships with JAL that produce hundreds of millions of dollars of value for JAL, and we are committed to maintaining and strengthening that partnership...As its country's, and the region's, biggest airline, Japan Airlines has been right in the eye of the storm. The media have been speculating extensively on JAL's prospects and its alliance strategy. We are convinced that we can deliver the most meaningful alliance value to JAL -- by a wide margin -- and without any of the regulatory risk a change in alliance strategy would mean for them, not to mention the financial costs JAL would incur if it changed alliances at such a critical phase in its restructuring...We are dedicated to do what we can to help JAL weather its current challenges and to assure it a long and healthy future as an important and equal member of oneworld," Gerard Arpey, CEO. Source: Company Statement, 09-Nov-2009.
Separately, Mr Arpey stated a change in alliances "would be a very bad idea for Japan Airlines" (Bloomberg/Associated Press, 09-Nov-2009). He added that if JAL becomes a Delta Air Lines partner, "that would certainly be very bad for us, but we don't control their decision-making process."
American Airlines: "We are taking a lot of business from somebody ... we're doing that at the expense of either United or Delta-Northwest," Gerard Arpey, Chairman and CEO. Source: Associated Press, 09-Nov-2009.
In other JAL news, Japan's Transport Ministry will reportedly put forward its rescue plan for JAL by this Friday, when the carrier is scheduled to reports its financial results for the six months ended Sep-2009 (The Yomiuri Shimbun/UPI, 09/10-Nov-2009). The rescue package is being prepared on instructions from Prime Minister, Yukio Hatoyama. Seperately, Enterprise Turnaround Initiative Corp of Japan President, Hiroshige Nishizawa, stated JAL's application for state-affiliated funding would not be decided upon this year (Bloomberg, 10-Nov-2009).
Enterprise Turnaround Initiative Corp of Japan: "Due diligence won't be quick. We're not going to be able to make a decision on whether to provide aid by the end of this year," Hiroshige Nishizawa, President. Source: Bloomberg, 10-Nov-2009.
Japan Government: "With the release of JAL's interim earnings results approaching, we will further discuss (the rescue package) with the premise that we will not create a situation in which airplanes do not fly,'' Seiji Maehara, Transport Minister. Source: UPI, 09-Nov-2009.
Japan Airlines may receive JPY100 billion (USD1.1 billion) in bridging loans from three major lenders, including the Development Bank of Japan, according to reports in The Mainichi Newspaper (Bloomberg, 10-Nov-2009). The agreement may be reached by 13-Nov-2009, according to the reports.
JAL, meanwhile, confirmed it would hold back salary payments for approximately 70 executives, including President Haruka Nishimatsu, for Dec-2009 (Associated Press/Bloomberg/The Yomiuri Shimbun, 09/10-Nov-2009). The carrier has already reduced a portion of its Directors' remuneration due to the carriers' reduced earnings. JAL is also considering skipping payment of customary Winter bonuses to 17,000 non-executive employees although a formal decision has not yet been made.