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) --



is denying weekend reports that it will likely lose its partnership with

Japan Air Lines


"Today's news accounts reporting that JAL has chosen an alliance partner are inaccurate and misleading," said American spokesman Charley Wilson.

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"American continues to negotiate with JAL," Wilson said. "Many important issues still need to be considered before a decision is made. We strongly believe it is best for Japan and for the Japanese people that JAL remains with Oneworld and American Airlines."

Over the weekend, Japanese media reported that JAL president Haruka Nishimatsu said he would prefer that


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replace American as JAL's U.S. partner.

The two carriers are locked in a public battle for JAL, which has the biggest operation at Tokyo's Narita Airport, the most important airport in Asia because it is the continent's principal hub. The battle has escalated to the point that both U.S. carriers are offering to oversee investment of more than $1 billion in bloated, potentially bankrupt JAL.

At Narita, about 40% of the passengers on American's five daily arrivals connect on JAL flights, so the short-term impact would be disastrous were Delta to succeed in its continuing efforts to replace American as JAL's partner. For investors, the battle is important because of the major hit American would take in the trans-Pacific were it to lose.

Meanwhile, on Sunday the Kyodo news agency reported that a government-controlled bank would double its credit line for JAL to about $2 billion, potentially enabling the carrier to avoid bankruptcy. JAL shares jumped 39% Monday following the report.

-- Written by Ted Reed in Charlotte, N.C.