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Japan Air Reportedly Favors American Pact

Japan Airlines is leaning toward staying in its alliance with AMR's American Airlines rather than joining an alliance with Delta, reports say.

TOKYO (

TheStreet

) --

Japan Airlines

is leaning toward staying in its alliance with

AMR's

(AMR)

American Airlines rather than joining an alliance with

Delta Air Lines

(DAL) - Get Report

, reports say.

American's bid to keep JAL in its Oneworld alliance has gained traction at least in part because of growing concerns a JAL-Delta partnership would trigger antitrust concerns in the U.S., the

Wall Street Journal

reports, citing people close to the matter.

Japan Airlines officials have decided that switching alliances is too risky and could hurt the company's turnaround efforts, reports Japan's

Asahi

newspaper.

JAL also is expected to break off talks with Delta about joining its SkyTeam alliance,

TST Recommends

Asahi

says.

The

Journal

reports no final decision has been made. An official decision on a partner is expected to be made this week or early next week, according to Masaru Onishi, the new president of JAL, Asia's largest carrier.

The Enterprise Turnaround Initiative Corp. of Japan, which is leading the restructuring of Japan Airlines, also favors an agreement with American, the

Journal

reports, citing a person close to the talks.

Delta said in a statement to the

Journal

that it "continues to be in discussion" with Japan Airlines and that it's "confident" a Delta-JAL joint venture would gain antitrust approval.

American, echoing Delta, said it believes its proposal would be the "best outcome'' for Japan Airlines and its consumers, the

Journal

reports.

-- Written by Joseph Woelfel in New York.

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