American Making Financial Case To Woo JAL

DAVID KOENIG

DALLAS (AP) — American Airlines is turning on the charm as it attempts to persuade Japan Airlines Corp. to strengthen their relationship instead of running off with a new suitor, Delta Air Lines Inc.

In recent days, the CEO of American parent AMR Corp. visited Tokyo to meet with his JAL counterpart, and the chief financial officer will go there next week, AMR officials say.

American's pitch is simple: Stay with us and things will get better. Go with Delta and you never know what might happen.

American says if JAL switches from the oneworld alliance of global airlines to Delta's SkyTeam alliance, it would cost JAL up to $500 million in lost revenue in the first two years after the changeover.

That figure assumes Delta initially will only be able to replace about half the revenue-sharing and other money that JAL currently gets from its oneworld partners, including American, based in Fort Worth, Texas.

On top of that, American officials say, if JAL sticks with them, they could both apply for antitrust immunity from U.S. and Japanese regulators and bring in up to $100 million a year in additional revenue. Such a tie-up would depend on U.S. and Japanese government officials striking a so-called open skies agreement that would reduce barriers to airlines from one country operating in the other.