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Japan Airlines puts finance talks with American Airlines, Delta on hold

The Dallas Morning News

Japan Airlines reportedly has put its talks with American Airlines and Delta Air Lines on hold until a government task force has finished its review of the carrier's financial structure.

The delay is likely to prolong the battle between American, which now has JAL in its camp, and Delta, which operates a large Tokyo hub and would like to add JAL's Japanese and Asian customers.

Japan Airlines, beset by huge losses, is trying to get its financial affairs in order and has been talking to both American and Delta about making an investment in JAL.

American executive Will Ris, speaking at an aviation conference Monday in Lexington, Ky., said a JAL decision to go with Delta would damage competition in Japan and Asia.

Delta, through merger partner Northwest Airlines, currently operates the biggest connecting hub in Tokyo for the SkyTeam global airline alliance. United Airlines also operates a major connecting hub at Tokyo with All Nippon Airlines, Japan's No. 2 carrier, giving their Star Alliance a major presence there as well.

American and JAL are key members of the third global airline alliance, Oneworld, and Ris said a switch by JAL would damage Oneworld's ability to compete in that part of Asia.

"In that circumstance, you're in effect moving from three alliances there down to two, and there's a lot of public policy implications there that have to be thought about," he said.

"This is not just a battle between carriers," he said. "It's healthy when we battle with each other, but it's not healthy when you move from alliances that can compete with others to ones that can't."

His comments came at a conference held by Boyd Group International, whose president, Michael Boyd, applauded Delta's efforts.

"Not to take sides here, but Delta Air Lines' attempt to grab Japan Airlines is a brilliant competitive move," Boyd said.

"When airlines and alliances fight with each other, it's always good," he said. "Consumers always win and airlines always win."

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