American Airlines offers $1.1 billion to JAL

American Airlines, other members of the Oneworld alliance and private equity house TPG have offered to invest as much as $1.1 billion in struggling carrier Japan Airlines (JAL)ÔÇönearly double the value of the package offered by Delta Air Lines.  American Airlines said the deal would also generate additional benefits worth $700 million to JAL over a period of 10 years.  The offer surpasses the $500 million of equity that Delta and SkyTeam alliance carriers have offered to buy as part of a $1 billion package that includes loans and sales guarantees.  Delta and American, the worldÔÇÖs biggest carriers, are battling over unprofitable JAL as the US and Japan discuss an open skies agreement, which would ease restrictions on flights between the two countries.  Both airlines are keen to gain access to JALÔÇÖs network in Asia.  Delta and American have said they would apply for antitrust immunity with JAL under open skies, a provision which allows airlines to work more closely on pricing, scheduling and marketing in order to increase revenues and lower costs.  JAL is seeking new investment and government support as it tries to fight bankruptcy. The carrier has said it needs to borrow $1.4 billion by the end of March 2010 to survive.  American has expressed that a Delta-JAL alliance would be unlikely to win regulatory approval as it would give SkyTeam carriers 62 percent market share on US-Japan routes. Currently, Oneworld, SkyTeam and Star Alliance each have about a third of the market.  AmericanÔÇÖs current agreement with JAL allows joint bookings and revenue sharing on selected flights.  AmericanÔÇÖs two-letter airline code is on JAL flights from Tokyo to five cities in the US and 15 Pacific destinations, as well as from Osaka to Honolulu.  JALÔÇÖs code is on American flights between four US cities and Tokyo.  As part of AmericanÔÇÖs offer, private equity firm TPG would be seeking an equity stake in JAL in exchange for a cash injection.  JAL is AsiaÔÇÖs largest airline by revenue.  *┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á *