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Fri, Nov 20, 2009

AA Pitches Oneworld Funding Package To Keep JAL Alliance

Delta Is Courting Japanese Carrier For SkyTeam

Delta Airlines has proposed a package worth more than $1 billion to JAL in an effort to woo the Japanese carrier away from American Airlines and the oneworld Alliance.

JAL already has an extensive codeshare agreement with American, but also has codeshare agreements with SkyTeam members such as KLM-Air France. The Wall Street Journal reports that both AA and Delta began talks with JAL earlier this year as the Japanese company struggled through the economic downturn.

American Airlines released a statement Wednesday regarding the oneworld "Total Value Proposition" for JAL, which reads:

"American and its oneworld partners are confident that the total value proposition they offer JAL is superior in every way to any alternative. An offer to make up for lost revenue at best merely gets JAL back to status quo while introducing costly disruptions and distractions that would naturally follow a risky move to switch alliances amid a massive financial restructuring.

"American stands ready to make a significant investment in JAL and remains confident that an American-JAL partnership can readily obtain antitrust immunity as early as the middle of next year, which would allow JAL to realize approximately $100 million in revenue annually in future years. American strongly believes that benefit can't be matched by another partner, and it would be in addition to the approximately $500 million in annual revenue that oneworld delivers to JAL today.

"When you add up the facts, the most value and best long-term solution for JAL comes from remaining with oneworld so that it can continue to focus on its recovery with partners that can help it build a stronger foundation for the future."

FMI: www.aa.com, www.delta.com, www.jal.com

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