- Title: JAPAN: American and Delta Airlines heat up bidding offers for troubled JAL
- Date: 4th December 2009
- Summary: TOKYO, JAPAN (DECEMBER 3, 2009) (REUTERS) AMERICAN AIRLINES CFO TOM HORTON WALKING UP TO PODIUM AT NEWS CONFERENCE AMERICAN AIRLINES LOGO AMERICAN AIRLINES NEWS CONFERENCE (SOUNDBITE) (English) AMERICAN AIRLINES CHIEF FINANCIAL OFFICER TOM HORTON SAYING: "American, Oneworld and TPG are prepared to invest up to 1.1 billion U.S. dollars, or roughly 100 billion yen, in JAL to bolster its financial foundation for the near and long term." REPORTER ASKING QUESTION (SOUNDBITE) (English) AMERICAN AIRLINES CFO TOM HORTON SAYING: "All told, total incremental support from American, Oneworld and TPG is in excess of 1.8 billion dollars compare to SkyTeam's 500 million dollars." AMERICAN AIRLINES NEWS CONFERENCE DELTA AIRLINES LOGO DELTA AIRLINES PRESIDENT EDWARD BASTIAN SITTING FOR INTERVIEW (SOUNDBITE) (English) DELTA AIRLINES PRESIDENT EDWARD BASTIAN SAYING: "Delta is the largest carrier in North America. Air France KLM is the largest carrier in Europe. JAL is the largest carrier across the Pacific. And we think it's only natural that the largest carriers in each region be aligned to provide many new options and many new points of service for its customer base, and thus the revenue growth and the success into the future." VARIOUS OF BASTIAN TALKING TO REPORTER (SOUNDBITE) (English) DELTA AIRLINES PRESIDENT EDWARD BASTIAN SAYING: "We have put forth a proposal of one billion dollars of financial support (that) comes in various forms; comes in capital, in equity, comes in some revenue guarantees, and comes in some asset-backed financing." MORE OF BASTIAN TALKING TO REPORTER
- Embargoed: 19th December 2009 12:00
- Keywords:
- Location: Japan
- Country: Japan
- Topics: Industry,Transport
- Reuters ID: LVA2BQZGDUXWWHRM2PFDAR7QK6CX
- Story Text: Japan Airlines found itself in the center of a bidding tussle Thursday (December 3) with American Airlines and Delta separately in Tokyo courting the beleaguered carrier with aid and investment offers.
American Airlines announced in a news conference that it, along with other Oneworld alliance members and private equity fund TPG, would be willing to invest $1.1 billion U.S. dollars in Japan Airlines to match a similar bid from rival Delta and the SkyTeam alliance.
"American, Oneworld and TPG are prepared to invest up to $1.1 billion U.S. dollars, or roughly 100 billion yen, in JAL to bolster its financial foundation for the near and long term," American Airlines Chief Financial Officer Tom Horton said.
American Airlines says that the total financial benefit from its backing would be equivalent to $1.8 billion when factoring in an estimated $700 million for the net present value of antitrust immunity over a period of 10 years.
"All told, total incremental support from American, Oneworld and TPG is in excess of 1.8 billion dollars compare to SkyTeam's 500 million dollars," Horton said.
While American is eager to prevent JAL's defection from Oneworld, Delta Air Lines is attempting to team up with a private equity fund or venture capital firm to offer more than its previously announced $1 billion to JAL.
The two are in an escalating bidding war over the lucrative Asian routes of Asia's biggest airline, which is seeking a state bailout to deal with mounting debt.
American Airlines has said it would apply for antitrust immunity with JAL under an "open skies" treaty to liberalise air travel between the U.S. and Japan. The treaty is expected to be agreed upon by the two governments as early as this month.
Meanwhile, Delta Airlines President Edward Bastian told Reuters Television that it's only natural for Delta 's SkyTeam to try to acquire Japan Airlines.
"Delta is the largest carrier in North America. Air France KLM is the largest carrier in Europe. JAL is the largest carrier across the Pacific. And we think it's only natural that the largest carriers in each region be aligned to provide many new options and many new points of service for its customer base, and thus the revenue growth and the success into the future," Bastian said in an interview.
"We have put forth a proposal of one billion dollars of financial support (that) comes in various forms; comes in capital, in equity, comes in some revenue guarantees, and comes in some asset-backed financing," Bastian said.
The escalating bidding war for JAL's attention helped its shares Thursday, which hit a record low last week.
Shares of JAL were up 1.1 percent, underperforming a 2.8 percent rise in the benchmark Nikkei average.
Asia's largest airline by revenue, which suspended some repayments on $15 billion in debt, has seen share plummet since Japan's transport minister and even its CEO said bankruptcy may be an option. - Copyright Holder: REUTERS
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