So we finally approach an end in this JAL dating dance – and it seems that JAL will remain with the OneWorld Alliance to American’s delight (and in equal annoyance to SkyTeam and Delta).
So lets look a lot deeper into this.
As it’s common knowledge, JAL has been falling apart recently, and towards the end of last year, it was courted initially by Delta to the tune of $1 Billion. American waded in with a higher offer of $1.3 Billion. However, as we all know things aren’t that simple for JAL as in an effort to preserve what was left of the company, it filed for bankruptcy protection in January 2010.
Delta being Delta didn’t address the JAL issue directly today, but instead pumped out this note:
“With recently announced plans to invest $1 billion in our product, Delta remains committed to providing a leading option for travel across the Pacific,” the airline said.
Whilst a Standard & Poor analyst notes that:
“Delta was looking at it as a chance to steal something from a competitor and it didn’t work.”
American now moves forward:
“American and JAL will now focus on building a joint venture that can offer JAL significant revenue growth beyond the stability that OneWorld offers today”
It’s important to note at this time, no money has been injected into JAL as it is still under bankruptcy protection
So why for the airline?
JAL wants to minimise costs at this time. Whilst a switch to SkyTeam may had been attractive, the last thing that is needed during this time period is the change involved.
Also, this would really open up a competition question as there would had been a minimal American Airlines presence, a heavy SkyTeam presence and a heavy Star Alliance presence.
And the upshot for passengers?
- The Status Quo for now.
- OneWorld members can still earn/redeem on JAL
- SkyTeam Members can groan that they’re not getting extended Asia coverage
- … and if you haven’t guessed already – expect more service cuts and more fleet rationalisation as things move forward. Already there are the massive staff layoffs coming, and in addition, the 747-400 fleet is now up for long term withdrawal.
Sources:
http://industry.bnet.com/travel/10004835/two-reasons-why-japan-air-lines-chose-american-and-oneworld-over-delta-and-skyteam/?tag=shell;content
http://www.businessweek.com/news/2010-02-09/amr-keeping-jal-over-delta-preserves-asian-strategy-update1-.html
http://www.msnbc.msn.com/id/35310704/ns/business-us_business/
