Page last updated at 06:49 GMT, Wednesday, 18 November 2009

Delta offers Japan Airlines $1bn

Japan Airlines plane
JAL is struggling with large debts

Struggling Japan Airlines (JAL) has been offered a $1bn (£600m) financial lifeline from the Sky Team grouping of airlines, led by Delta Air Lines.

Delta said the funds were being offered to JAL if it switched from its current membership of the One World Alliance, which includes American Airlines.

The news comes as JAL is seeking a financial bail-out from the Japanese government, its fourth since 2001.

Delta is said to be keen to be able to expand its routes to Japan.

Forming a closer alliance with JAL would enable it to do this ahead of the planned liberalisation of air routes between the US and Japan.

The Sky Team's offer to JAL includes a proposal to buy $500m in JAL shares, $300m of guarantees to cover any short-term loss in sales caused by it leaving the One World alliance, $200m in asset-backed financing, and $20m to cover JAL's costs for switching alliances.

JAL has declined to comment on the offer.

Last week, JAL reported a net loss of 32.3bn yen ($357m; £214m) for the July to September period, compared with a 40.1bn yen profit a year earlier.

JAL is struggling with $15bn of debts and a big pension deficit as well as falling passenger numbers.



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