Air France-KLM is reportedly in talks with Japan Airlines (JAL) to invest up to $300 million (Ôé¼205 million) for a stake in the struggling carrier.
JAL, JapanÔÇÖs largest airline by revenue, is seeking to raise Y255 billion and cut costs after borrowing Y100 billion from the Japanese government last year.
Other carriers said to be interested in a stake include Delta Air Lines and American Airlines. Each airline will discuss an investment of between $200 million and $300 million, in exchange for a stake in the business and a code-sharing agreement.
JAL owns the largest hub at AsiaÔÇÖs most strategically important airport, Tokyo Narita. A tie-up with Air France could significantly boost the Japanese firmÔÇÖs presence in Europe.
JAL is regulated by the Japanese transport ministry, who will be heavily involved in the decision-making process. According to Reuters, the ministry is favouring a tie-up with Air-France or Delta, as their balance sheets look healthier than those of American Airlines.
However, JAL is said to prefer the American carrier, as it has been its code-sharing partner for a decade.
Code sharing is a partnership where one carrier markets service and places its flight code on another carrier's flights, allowing it to cover destinations not in its usual route structure.
Air France-KLM, the largest airline company in the world by revenue, is headquartered at Charles de Gaulle airport in Paris. It has just over 100,000 employees.
The airline holds minority stakes in a number of other carriers, including Kenya Airways, Royal Air Maroc and Air Mauritius.
Talks with JAL are said to be in the preliminary stages, with no agreements made as yet.
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