The airline alliance oneworld is offering up to $2 billion in ‘enhanced commercial benefits’ for struggling Japan Airlines.
January 12: The airline alliance oneworld is offering up to $2 billion in ‘enhanced commercial benefits’ for struggling Japan Airlines (JAL) as it fends off liquidation pressures.
Fellow alliance members American Airlines (AA), British Airways (BA), Qantas Airways and Cathay Pacific Airways have made the offer to “minimize risk for the Japanese government and taxpayers and maximize benefits for air travellers”, a press release said.
Seen as a key component of a comprehensive, government-led restructuring plan for JAL, as part of the proposal the airline would remain a key partner in oneworld. “This proposal demonstrates oneworld’s extraordinary commitment to JAL,” said Tom Horton, AA’s Executive Vice President of Finance and Planning and Chief Financial Officer. “It brings stability and certainty to JAL at a time when it is most needed – it provides JAL the greatest long-term value at the lowest risk.”
The offer provides for “vastly enhanced” commercial relationships between JAL and AA, BA and Qantas. The $2 billion commitment and benefits would be realised by JAL over three years and includes $1.5 billion of revenue that JAL realises from oneworld, $300 million in revenue guarantees from AA and approximately $200 million in enhancements from BA. From April BA will more than double the European points on which it code shares with JAL, providing greater opportunities for seamless passenger travel.
AA is also offering JAL support and cooperation in areas such as fleet planning, network analysis, financial forecasting, revenue management, and maintenance operations. Since 2003 AA has implemented cost-saving programmes saving the airline approximately $6 billion.