JAL looks to Delta for cash

17 September 2009

TOKYO: JAL, the struggling Japanese air carrier, will attempt to conclude tie-up talks with Delta Airlines and American Airlines before the end of October.

Both Delta and American are vying to buy a stake in JAL, which incurred its biggest-ever quarterly net loss, of ¥99 billion ($1bn; €681m; £605m), in the three months to June this year.

The cash-strapped airline is reportedly also in talks with Air France-KLM, Europe's biggest airline group, and with Korean Airlines over a potential cash injection.

Haruka Nishimatsu, president of JAL – which was privatised in 1987 and now ranks as Asia's biggest airline – said some 6,800 redundancies would be made over the next three years.

Battered by the downturn in global air travel, the firm also plans to cut flights and slash costs by some ¥53bn during the current financial year.

Delta has offered to invest as much as ¥50bn in the firm, which would give it a 11.2% stake. Under Japan's aviation law, foreign firms can own up to one-third of a national airline.

Data sourced from Business Week; additional content by WARC staff