Previously, the world's largest and second largest airlines sought to outbid each other. Now, they are debating whether U.S. regulators would approve a joint request by Delta and JAL for antitrust immunity across the Pacific, if one were to be filed.
As an example of the intensity of this debate, American CEO Gerard Arpey declared last week that "it would make an absolute farce of the Open Skies process" if regulators approve the Delta request.
Why so much attention to predicting the DOJ's intent? Because the Japanese decided they had enough of the bidding war, which turned the nation's flag carrier into an auction prize for two big U.S. companies.Both airlines had offered more than $1 billion before the Japanese rebelled, saying they did not want any foreign investment in JAL. American's bid even includes participation by private equity firm TPG Group. Aviation consultant Robert Mann suggests this might have pushed the Japanese over the edge as far as the idea of seeking outside investors. It is bad enough that two U.S. carriers can fly beyond Japan's principal airport, an internationally unique arrangement enabled by a post-World War II agreement, and that a U.S. airline would own a portion of their flag carrier. Now, he says, in a final insult, somebody wants to bring in a U.S. "vulture player." As Delta bids to replace American as JAL's partner, the prize is not JAL itself, but rather JAL's pre-eminent position at Tokyo's Narita Airport, Asia's most important hub. Meanwhile, the U.S. and Japan have reached a preliminary Open Skies agreement, and some Japanese media reports have said the agreement includes guaranteed antitrust immunity for Japanese carriers JAL and ANA and their partners.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV