UPDATE: American Air CEO Touts Alliance Gains For JAL
(Updates with additional comments from CEO)
By Ann Keeton
Of DOW JONES NEWSWIRES
The head of American Airlines claimed Monday that its Oneworld alliance was
the best partner for Japan Airlines "by a wide margin," as rival Delta seeks to
lure the Asian carrier into its own SkyTeam grouping.
Gerard Arpey, Chairman and Chief Executive of American parent AMR Corp. (AMR),
also used a speech in Mexico City to raise the specter of any Delta-JAL alliance
being targeted by antitrust authorities.
American is trying to keep Japan Airlines Corp. (JALSY, 9205.TO) in Oneworld,
pledging to expand cooperation and inject funds into the loss-making carrier,
which is seeking aid from the Japanese government.
"We are convinced that we can deliver the most meaningful alliance value to
JAL--by a wide margin--and without any of the regulatory risk a change in
alliance strategy would mean for them, not to mention the financial costs JAL
would incur if it changed alliances at such a critical phase in its
restructuring," said Arpey.
His remarks came in a speech delivered to mark the entry of Mexicana to
Oneworld, the second Latin American partner after Lan Airlines (LAN-SG).
Talking later to reporters, Arpey said Mexicana and LAN make Oneworld easily "
the strongest alliance to Latin America."
He declined to comment on whether Salvadorean carrier Taca, which plans to
merge with Colombia's Avianca, may join the alliance.
"Undoubtedly, there will be other pieces of the puzzle in this region of the
world, but I wouldn't speculate today on who they may be," Arpey said. The
official said Oneworld was looking closely at Brazil for potential partners.
JAL, which is expected to report a large fiscal first-half loss Friday, is
cutting routes and jobs to counter an inefficient network and the burden of its
debt load and pension deficit.
However, both U.S. carriers view it as a valuable prize with access to
congested Tokyo airports and traffic connecting to other points in Asia. Star,
the third global alliance, is allied with All Nippon Airways Inc. (9202.TO).
Delta Air Lines Inc. (DAL) has remained relatively silent amid the increasing
rhetoric from American, but has pledged to provide a capital injection of its
own to aid JAL's transition.
Both Delta and American--and members of Star--hope that a new aviation treaty
being negotiated between the U.S. and Japan will provide more opportunities to
expand alliance cooperation.
Arpey said in Mexico City that JAL is "more likely to realize the benefits of
an immunized relationship under a Japan-U.S. open skies agreement" with
Oneworld.
While he cited potential regulatory problems for a JAL-Delta deal, American is
awaiting word from regulators on its own application for antitrust immunity with
British Airways PLC (BAIRY, BAY.LN, TD-BAB) and other Oneworld partners.
Critics contend that proposal raises similar questions over market
concentration at London Heathrow as Arpey suggested could arise in Tokyo.
-By Ann Keeton, Dow Jones Newswires; 312-750-4120; ann.keeton@dowjones.com
(Doug Cameron and Paul Kiernan contributed to this article.)
(END) Dow Jones Newswires
11-09-091942ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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