American Airlines, partners offer $1.1 billion to help JAL

December 3, 2009, 2:10pm

TOKYO (AP) – American Airlines upped the ante in the tug-of-war over Japan Airlines, vowing Thursday to lead a $1.1-billion investment in the struggling carrier to prevent it from falling into the orbit of rival Delta.

American's chief financial officer, Tom Horton, told reporters that the offer is "far superior'' to the $1-billion rival proposal from Delta Air Lines and its SkyTeam partners.

He refused to describe the composition of the offer, or say how much of the money would come from American. But he said the proposal by American, its oneworld partners and private equity firm TPG Inc. is part of a larger restructuring plan to get JAL back on solid footing.

Delta, meanwhile, is trying to lure JAL away from its partnership with American.

Japan Airlines has been teetering for years, hammered by surging fuel prices, global competition and an image problem caused by a series of safety lapses.

JAL President Haruka Nishimatsu has said he will make a decision regarding the offers by the end of the year.

Delta President Ed Bastian said Thursday the billion-dollar offer by his airline and its SkyTeam partners to get Japan Airlines to join their alliance is still on despite the dollar's recent weakness. He expressed confidence the deal will get clearance from regulators.

"The offer was stated in dollars,'' Bastian told reporters at a Tokyo hotel. "That's not enough to change our offer,'' he said in acknowledging the dollar's recent weakness. It fell to a 14-year low against the yen last week.

Bastian said Delta, based in Atlanta, would be willing to consider teaming up with a third-party investor if the Japanese government wanted more money pumped into JAL. He did not provide details.

American, a unit of AMR Corp., which is based in Fort Worth, Texas, has said if JAL switches from the oneworld alliance it will cost the Japanese carrier up to $500 million in lost revenue in the first two years after the changeover.