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JAL Talks With DL And AMR Are Back On.  
User currently offlineDeltaL1011man From United States of America, joined Sep 2005, 9317 posts, RR: 14
Posted (4 years 10 months 1 week 1 day 10 hours ago) and read 6835 times:

Oct. 19 (Bloomberg) -- Japan Airlines Corp., seeking its fourth state bailout since 2001, resumed talks with Delta Air Lines Inc. and AMR Corp.’s American Airlines over a possible capital alliance, three people familiar with the matter said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=abbPbQANlc6c

Let the DL is better than AA, AA is better than DL, Oneworld is better than Sky, Sky is better than oneworld talk start.....again.  Yeah sure


yep.
30 replies: All unread, showing first 25:
 
User currently offlineManfredj From United States of America, joined Mar 2007, 1132 posts, RR: 0
Reply 1, posted (4 years 10 months 1 week 1 day 10 hours ago) and read 6788 times:

AA is better than Delta. Oneworld is better than sky.

No but seriously, I don't want to see Delta have their hands in anything more than they already have.

AA/JAL is a more interesting combination and could do wonders for both airlines and create a bit of competition with DL. AA is a well run company. Just seems like a good match to me.

I've always thought AA/CO would be a good pair to merge as well.



757: The last of the best
User currently offlineATLFlyer323 From United States of America, joined Jan 2005, 614 posts, RR: 0
Reply 2, posted (4 years 10 months 1 week 1 day 10 hours ago) and read 6748 times:



Quoting Manfredj (Reply 1):
No but seriously, I don't want to see Delta have their hands in anything more than they already have.

I actually agree with this statement. I am a DL fanboy, but worry that JAL may be to big of a bite for DL to handle right now. They still have merger bumps to worry about I would assume.

How much money is JAL looking asking for, and what roles would AA or DL play in JAL if they were to invest in the company?

-Brandon



Everyday, the fluffy temptation of wheat!
User currently offlineFlyibaby From United States of America, joined Aug 2004, 1017 posts, RR: 6
Reply 3, posted (4 years 10 months 1 week 1 day 10 hours ago) and read 6690 times:



Quoting Manfredj (Reply 1):
No but seriously, I don't want to see Delta have their hands in anything more than they already have.

AA/JAL is a more interesting combination and could do wonders for both airlines and create a bit of competition with DL. AA is a well run company. Just seems like a good match to me.

I cannot help but wonder if the DL alliance would really benefit DL so much to make this sort of an investment in. I understand the SkyTeam reason, but if for SkyTeam, how much are all the other members kicking in for this? DL has pretty decent coverage of their own to SGN, MNL, ect, via NRT from the US.

I wouldn't say AA is that well run of a company - I think we are still seeing too many lingering effects of their decision not to file for BK when the others did and their labor is still higher than the rest of the industry. I like AA, don't get me wrong, I just think the next couple of years will really show us if they are able to make a comeback to the kind of company they were circa 1999 - 2000.


User currently offlineSeemyseems From United Kingdom, joined Jan 2009, 967 posts, RR: 7
Reply 4, posted (4 years 10 months 1 week 1 day 10 hours ago) and read 6690 times:

Are AF-KL still interested in an alliance with JL?

[Edited 2009-10-19 11:45:35 by seemyseems]


seemyseems
User currently offlineLAXdude1023 From India, joined Sep 2006, 7550 posts, RR: 25
Reply 5, posted (4 years 10 months 1 week 1 day 10 hours ago) and read 6669 times:

It will be interesting to see what happens. If JL goes with DL, it will force AA to open up routes that they would rather feed through JL. AA would probably have to open up ORD-HKG and probably another Asia route from DFW (ICN probably). AA feeds ALOT of traffic to the NRT-ICN and HKG flights from DFW and ORD. I will say if AA doesnt keep JL, and they do nothing to add capacity to DFW, they will lose alot of traffic to KE. It puts AA in a funny spot.

If JL stays with AA, I imagine DL will probably try to turn the heat up in Asia, but at a significant cost to them.



Stewed...Lewd...Crude...Irreverent...Belligerent
User currently offlineLuckyone From United States of America, joined Aug 2008, 2168 posts, RR: 0
Reply 6, posted (4 years 10 months 1 week 1 day 10 hours ago) and read 6621 times:

Lord will this end??Lol. You have two companies fighting their damnedest. One to divest a more than likely money-losing operation and the other gaining a toehold. Why don't they just swap operations? AA buy Delta's Nartia operation. Delta, transfer all your traffic to Incheon...Seems simple doesn't it!  Wink

User currently offlineBMI727 From United States of America, joined Feb 2009, 15730 posts, RR: 26
Reply 7, posted (4 years 10 months 1 week 1 day 10 hours ago) and read 6588 times:

The only other time I can remember with this sort of bidding war over an airline would have been when Pan Am and Texas International were both trying to buy National. Of course, PA ended up paying an exorbitant price that contributed to their demise, so both AA and DL should exercise caution to not overextend themselves.


Why do Aerospace Engineering students have to turn things in on time?
User currently offlineDeltaL1011man From United States of America, joined Sep 2005, 9317 posts, RR: 14
Reply 8, posted (4 years 10 months 1 week 1 day 9 hours ago) and read 6505 times:



Quoting Seemyseems (Reply 4):
Are AF-KL still interested in an alliance with JL?

AF/KL/KE/CZ/DL are looking into adding money with DL giving the most. AA/BA/QF are doing the same with AA putting in most of the money. It is funny how everyone said "IF DL buys part of JL then KE will drop out of Sky and join Oneworld" but for some reason KE missed that memo........

Quoting LAXdude1023 (Reply 5):
I imagine DL will probably try to turn the heat up in Asia,

They really cant to to much. Its a lose-lose in my mind. DL get them then DL wil outsoruce most of the NRT opps out to JL. AA gets them then they wont be adding many routes. One employee group will get the shaft here.........In my mind its better for JL if they go with Delta.....here is why. If They go with Delta, DL will very very very likely drop alot of the NRT opps. Also DL has a ton of NRT slots which JL could lease/buy from DL. While AA does offer alot with staying in oneworld, I just don't see how they can really help JL out side of just giving them money......And I really don't want DL to buy part of JL just for the record.

Quoting Luckyone (Reply 6):

sounds good for AA.......not sure how this helps Delta though.  Wink



yep.
User currently offlineManfredj From United States of America, joined Mar 2007, 1132 posts, RR: 0
Reply 9, posted (4 years 10 months 1 week 1 day 9 hours ago) and read 6498 times:



Quoting BMI727 (Reply 7):
PA ended up paying an exorbitant price that contributed to their demise

Lesson learned. You can be sure these two are in it solely to get a deal. When I said AA is a well run company, this is what I was referring to. If they can steal JAL and use some of its route structure, they know they will benefit from it.

Quoting Flyibaby (Reply 3):
I wouldn't say AA is that well run of a company - I think we are still seeing too many lingering effects of their decision not to file for BK

The day that NOT filing for bankruptcy means you are not well run is the day I have lost total faith in our government/corporate structure. AA has a history of surviving by lurk and attack (Braniff, etc etc) and this will be no exception.



757: The last of the best
User currently offlineFlyibaby From United States of America, joined Aug 2004, 1017 posts, RR: 6
Reply 10, posted (4 years 10 months 1 week 1 day 9 hours ago) and read 6405 times:



Quoting Manfredj (Reply 9):
The day that NOT filing for bankruptcy means you are not well run is the day I have lost total faith in our government/corporate structure. AA has a history of surviving by lurk and attack (Braniff, etc etc) and this will be no exception.

No don't take what I said out of context, I am just saying that the playing field won't level off anytime soon unless they do something about their labor rates. BK is a fairly obvious time to do it, but I do admire them for not going down that path. They do on the other hand need to get labor under control, or else they risk stalling any real growth.


User currently offlineManfredj From United States of America, joined Mar 2007, 1132 posts, RR: 0
Reply 11, posted (4 years 10 months 1 week 1 day 9 hours ago) and read 6383 times:



Quoting Flyibaby (Reply 10):
They do on the other hand need to get labor under control

I think you've also just solved the problem at UA too  Smile



757: The last of the best
User currently offlineFlyibaby From United States of America, joined Aug 2004, 1017 posts, RR: 6
Reply 12, posted (4 years 10 months 1 week 1 day 9 hours ago) and read 6338 times:



Quoting Manfredj (Reply 11):
I think you've also just solved the problem at UA too

Nah - they have waay too many other problems than just labor to contend with.  Smile


User currently offlineLHCVG From United States of America, joined May 2009, 1552 posts, RR: 1
Reply 13, posted (4 years 10 months 1 week 1 day 9 hours ago) and read 6291 times:

So which is the heavier influence - AA's OW partnership with JL, or DL's inherited clout/influence/whatever, such as it is, from the apparent relationship NW had in the beginnings of JL? I've been pondering who has the advantage on this one. One the one hand, the current OW relationship would seem important, although as previous threads discussed, money does talk if DL were to outbid AA. However, if there is indeed some latent affection for the old NW, then I could see the JL folks leaning this way.

User currently offlinePanamair From United States of America, joined Oct 2001, 4895 posts, RR: 25
Reply 14, posted (4 years 10 months 1 week 1 day 8 hours ago) and read 6166 times:
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Quoting LHCVG (Reply 13):
if there is indeed some latent affection for the old NW

Affection for NW has little to do with it....Obviously JL's participation in Oneworld will play a big part in the consideration and give AA/BA and advantage; DL/NW's 'advantage' for JL would be essentially the elimination of a decent-sized competitor at NRT (DLNW) if DLNW and JL were to cooperate. JL and DL will coordinate skeds, trade slots, share flights, etc., which probably means DLNW eliminating a lot of their existing intra-Asia flying and even some Transpac flights to/from NRT in favor of JL equipment.


User currently offlineSurfdog75 From United States of America, joined Nov 2005, 331 posts, RR: 0
Reply 15, posted (4 years 10 months 1 week 1 day 8 hours ago) and read 6135 times:



Quoting Panamair (Reply 14):
Affection for NW has little to do with it....Obviously JL's participation in Oneworld will play a big part in the consideration and give AA/BA and advantage; DL/NW's 'advantage' for JL would be essentially the elimination of a decent-sized competitor at NRT (DLNW) if DLNW and JL were to cooperate. JL and DL will coordinate skeds, trade slots, share flights, etc., which probably means DLNW eliminating a lot of their existing intra-Asia flying and even some Transpac flights to/from NRT in favor of JL equipment.

For the sake of DL employees everywhere I hope DL doesn't win this. One more step toward the virtual airline and fewer DL employees required. Let's just buy the MD-90s they'd like to unload and let American/BA spend their cash on shoring up JAL's finances.


User currently offlineWA707atMSP From United States of America, joined Oct 2006, 2221 posts, RR: 8
Reply 16, posted (4 years 10 months 1 week 1 day 7 hours ago) and read 6055 times:

It's pretty clear AA needs a partnership with JAL more than DL does.

JAL is the only large airline in northeast Asia that isn't allied with Star (OZ, CA, NH) or SkyTeam (KE). If JAL "defects" to SkyTeam, there will be a very large gap in AA's global coverage, that will be almost impossible to fill in the near term.

For that reason, I think AA will bid more aggressively than DL - DL can afford to let JL stay in OneWorld, but AA cannot afford to let JL defect to SkyTeam!



Seaholm Maples are #1!
User currently offlineEddieDude From Mexico, joined Nov 2003, 7569 posts, RR: 43
Reply 17, posted (4 years 10 months 1 week 1 day 6 hours ago) and read 5913 times:



Quoting ATLFlyer323 (Reply 2):
I actually agree with this statement. I am a DL fanboy, but worry that JAL may be to big of a bite for DL to handle right now. They still have merger bumps to worry about I would assume.

How much money is JAL looking asking for, and what roles would AA or DL play in JAL if they were to invest in the company?

Well, the way I understand it is that JL is looking for a new strategic (but non-majority) shareholder. So DL or AA (whoever wins) would make a capital contribution of several hundred million dollars to JL in exchange for a non-controlling equity stake (as opposed to outright buying all of JL, which would be a much more expensive and riskier endeavor). So, back to the strategic investor role, JL wants a new shareholder that is an airline that can complement is route structure and with whom it can have a comprehensive codeshare arrangement; this investor would have some power (via the appointment of one or more members to the board) but would not be the controlling equityholder.

Quoting Flyibaby (Reply 3):
I cannot help but wonder if the DL alliance would really benefit DL so much to make this sort of an investment in. I understand the SkyTeam reason, but if for SkyTeam, how much are all the other members kicking in for this? DL has pretty decent coverage of their own to SGN, MNL, ect, via NRT from the US.

I may be mistaken but the idea would be for DL/NW to de-hub NRT. With JL as a strategic partner, DL can stop serving most if not all of the NRT-Asia-NRT routes with its own planes and instead have JL take care of the passengers connecting at NRT. So, in other words, a passenger would no longer fly ATL-NRT-SGN all with DL, but ATL-NRT with DL and NRT-SGN with JL. Same thing, different name. By doing this, DL and JL would cut capacity and boost yields.

Quoting LHCVG (Reply 13):
So which is the heavier influence - AA's OW partnership with JL, or DL's inherited clout/influence/whatever, such as it is, from the apparent relationship NW had in the beginnings of JL? I've been pondering who has the advantage on this one. One the one hand, the current OW relationship would seem important, although as previous threads discussed, money does talk if DL were to outbid AA. However, if there is indeed some latent affection for the old NW, then I could see the JL folks leaning this way.

I don't think that the decades-old connection of NW and JL (or any sort of affection between them) would be relevant. It will all come down to business and which partnership gives JL better financial terms and growth prospects. AA is good because there would be no switching of alliances, because presumably it is not just AA willing to invest, but rather a consortium of AA, BA and QF, and because AA can offer lots of convenient connections to JL passengers in the Americas. On the other hand, DL has the advantage that it is the world's largest carrier, is presumably in better shape -financially- than AA, DL also seems to be working in coordination with KE and AF towards investing in JL, and JL already has some codesharing/mileage deals with NW (domestically) and other SkyTeam members such as AF (and AM for the MEX-YVR segment I believe), so the transition to SkyTeam would not be as traumatic and complicated as it would be for a different carrier.

Quoting WA707atMSP (Reply 16):
I think AA will bid more aggressively than DL - DL can afford to let JL stay in OneWorld, but AA cannot afford to let JL defect to SkyTeam!

This is also another interesting aspect of the deal. Many people seem to think DL is only doing this so as to push the price up and force AA into a super-expensive deal that would further debilitate AA. Whether or not that is the intent of DL, AA will certainly have to spend more than it expects if a bidding war with DL takes place and AA decides it cannot let JL go to its enemy's arms.



Next flights: MEX-GRU (AM 77E), GRU-GIG (JJ A320), SDU-CGH (G3 73H), GRU-MEX (JJ A332).
User currently offlineDeltaL1011man From United States of America, joined Sep 2005, 9317 posts, RR: 14
Reply 18, posted (4 years 10 months 1 week 1 day 5 hours ago) and read 5775 times:



Quoting Surfdog75 (Reply 15):
For the sake of DL employees everywhere I hope DL doesn't win this. One more step toward the virtual airline and fewer DL employees required. Let's just buy the MD-90s they'd like to unload and let American/BA spend their cash on shoring up JAL's finances.

 checkmark   checkmark   checkmark   checkmark   checkmark 

Quoting EddieDude (Reply 17):
This is also another interesting aspect of the deal. Many people seem to think DL is only doing this so as to push the price up and force AA into a super-expensive deal that would further debilitate AA. Whether or not that is the intent of DL, AA will certainly have to spend more than it expects if a bidding war with DL takes place and AA decides it cannot let JL go to its enemy's arms.

For Anderson and co its win win. Make AMR pay a bunch, and hopefully more, than what JL is worth, or get a Japan based partner and cut NRT. win win.



yep.
User currently offlineMAH4546 From Sweden, joined Jan 2001, 32698 posts, RR: 72
Reply 19, posted (4 years 10 months 1 week 1 day 5 hours ago) and read 5745 times:

Quoting DeltaL1011man (Reply 18):

For Anderson and co its win win. Make AMR pay a bunch, and hopefully more, than what JL is worth, or get a Japan based partner and cut NRT. win win.

Until AMR calls on Delta's bluffs, lets Delta get stuck with the burden of JAL and then AA can go off and acquire slots at Narita and Haneda from the new slot lotteries that are thanks to new runway construction, which will open plenty of Narita/Haneda slots to international carriers and far decrease the value/prestige of Narita slots today. So AA can effectively increase it's Tokyo operations by 100-150% by 2012. Not to mention that JAL leaving OW would likely mean AA aggressively expanding to Asia with its own metal - starting in the form of ORD-HKG, DFW-ICN and probably an LAX-China route. Boeing certainly wouldn't stop AA from moving up its 2013 772 deliveries very quickly, and AA would have no problem paying for the planes. Definitely win-win for Delta, yup.

Here is on near certainty: if the AA/JAL partnership ends, AA will take it upon itself to aggressively expand into Asia in the 1-3 years after the partnership ends, from Dallas, Chicago and Los Angeles. AA is always very comfortable letting alliance partners do much of the flying. But when there is no alliance partner to do the flying, AA will do itself - just look at Canada and Mexico. AA is the largest U.S. airline to both.

You make it sound like airlines are playing with monopoly money.

[Edited 2009-10-19 17:03:00]

[Edited 2009-10-19 17:04:00]


a.
User currently offlineLHCVG From United States of America, joined May 2009, 1552 posts, RR: 1
Reply 20, posted (4 years 10 months 1 week 1 day 5 hours ago) and read 5739 times:



Quoting DeltaL1011man (Reply 18):
For Anderson and co its win win. Make AMR pay a bunch, and hopefully more, than what JL is worth, or get a Japan based partner and cut NRT. win win.

My thoughts as well, which has me wondering: knowing this, why does AA leave itself open to possibly bleeding itself for little gain (and a good gain for DL either way) here?


User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 21, posted (4 years 10 months 1 week 1 day 5 hours ago) and read 5702 times:



Quoting MAH4546 (Reply 19):
Until AMR calls on Delta's bluffs, lets Delta get stuck with the burden of JAL and then AA can go off and acquire slots at Narita and Haneda from the new slot lotteries that are thanks to new runway construction, which will open plenty of Narita/Haneda slots to international carriers and far decrease the value/prestige of Narita slots today.

do you not think DL realizes this? And DL does have more than enough opportunities to expand and rework its Pacific operation? AA, next to none.

I'm not interested in rehashing this argument but let's be just a TAD honest about what both AA and DL are doing. While AA has argued with labor for the past 7 years, DL has built the most expansive US carrier network and posted margins that are ahead of what AA is doing. To think that DL is going to somehow get hurt in this is a bit of a stretch.

Many others have said that AA is in a lose-lose situation with JAL and that is absolutely correct. AA is the one that has a full plate and few strategic options - BECAUSE OF LABOR. Can you imagine what the APA will be filing with the government if AA makes a bid for JAL?

Despite all that anyone might say, AA's number one, two, and three largest problems are labor, labor, and labor. Until they are all solved, there will be no forward movement for AA. And competitors will continue to take advantage of that situation.


User currently offlineLuckyone From United States of America, joined Aug 2008, 2168 posts, RR: 0
Reply 22, posted (4 years 10 months 1 week 1 day 4 hours ago) and read 5675 times:



Quoting MAH4546 (Reply 19):
starting in the form of ORD-HKG, DFW-ICN and probably an LAX-China route

 old  AA union rules would make the ORD-HKG an ordeal wouldn't it?


User currently onlineOA412 From United States of America, joined Dec 2000, 5240 posts, RR: 25
Reply 23, posted (4 years 10 months 1 week 1 day 4 hours ago) and read 5599 times:



Quoting MAH4546 (Reply 19):
Until AMR calls on Delta's bluffs, lets Delta get stuck with the burden of JAL and then AA can go off and acquire slots at Narita and Haneda from the new slot lotteries that are thanks to new runway construction, which will open plenty of Narita/Haneda slots to international carriers and far decrease the value/prestige of Narita slots today. So AA can effectively increase it's Tokyo operations by 100-150% by 2012.

And what exactly will AA do about all the traffic it will lose once it no longer has the partnership with JL to feed its US-NRT flights? Somehow I doubt that AA will double NRT flying if JL were to leave Oneworld.

Quoting MAH4546 (Reply 19):
Definitely win-win for Delta, yup.

But it's never anything but a win-win for AA right?



Hughes Airwest - Top Banana In The West
User currently offlineFlyibaby From United States of America, joined Aug 2004, 1017 posts, RR: 6
Reply 24, posted (4 years 10 months 1 week 1 day 4 hours ago) and read 5590 times:



Quoting WorldTraveler (Reply 21):
While AA has argued with labor for the past 7 years, DL has built the most expansive US carrier network and posted margins that are ahead of what AA is doing

Dude, I agree with you alot but your going to open a can of worms on this note, just like in every thread about AA vs. DL

Quoting DeltaL1011man (Reply 23):
B) have to add a bunch of flights they don't really want to add.

AA doesn't have the metal to put on routes such as these, without cannibalizing other routes. AA hasn't yet even locked in financing on all the 737's they are taking on with exception to the ones coming on line within the next year. A 1-3 year timeframe as stated above with the new slot lotteries might not even be enough leeway to secure financing and aquire additional widebodies in order to get a solid foot in this door.


25 NYCAdvantage : And that is the intriguing thing for AA, AA may offer more $$ and DL could still walk with JL because of their position at NRT. Now I have a question
26 Centrair : I don't think it would be a win-win for anyone. JAL has been unable to make itself effective since 2001. JAL made their first mistake by merging with
27 LHCVG : Sorry if this is considered OT, but if DL loses the JL bid, would they concerned enough to start talking to KE, or is ICN not as valuable a prize?
28 Post contains links CrAAzy : AA recently announced they have locked in all the financing on all of their 737s on order. http://seattle.bizjournals.com/seatt.../2009/09/14/daily38
29 Carpethead : Couldn't agree with you any more, but I suspect the Japanese government will come to the rescue when JL is really ready to fold. JL can easily clean
30 ManuCH : This thread has veered way off topic and turned into name calling among a few members. Therefore it is now being locked. Any additional posts that are
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