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AVIATION

Delta mulls stake in Japan Airlines

To increase its presence in Japan, Delta Air Lines may inject much-needed millions into Japan Airlines for a stake in the struggling carrier.

Associated Press

Delta Air Lines is considering making a cash infusion of a couple hundred million dollars to aid struggling Japan Airlines a person briefed on the talks said Friday.

In exchange for the infusion, the person said the world's biggest airline operator could get a stake in Japan Airlines, an expanded presence in Japan and coveted access to the closest airport to the Tokyo business center.

The talks between the twocarriers were in their preliminary stage, and it was unclear whatform a partnership between Delta and Japan Airlines might take,said the person, who askednot to be identified by namebecause of the sensitivity of the discussions.

``There's definite interest on both sides,'' the person said.

Delta subsidiary Northwest Airlines has a history with Japan Airlines, having handled flight operations for the Japanese carrier in the early 1950s, according to JAL's website.

A Delta spokesman declined to comment.

JAL spokesman Satoru Tanaka said the airline was considering various tie-ups with a wide variety of potential partners but nothing had been decided.

Japan Airlines already has a codeshare agreement with American Airlines as part of its participation in the oneworld alliance. Delta's SkyTeam alliance currently doesn't have a Japanese partner.

An American spokesman declined to speculate on how a Delta-Japan Airlines deal might impact American's relationship with Japan Airlines.

``We would not routinely comment on the media rumors and speculation involving one of our oneworld partners,'' American spokesman Tim Smith said. ``We obviously would note that JAL has been a very good partner for both American and oneworld.''

Hit by plummeting demand in a slumping global economy and swine flu fears, JAL incurred its biggest-ever quarterly net loss of 99 billion yen ($1 billion) in the three months to June.

The airline has forecast a net loss of 63 billion yen for the current fiscal year to March 2010.

American's Smith declined to say whether his airline also was talking to Japan Airlines about making a cash infusion in the carrier.

Delta has cash to invest, though most major U.S. carriers have been trying to preserve their cash because of big revenue declines due to a steep dropoff in demand for air travel amid the global economic downturn.

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