Posts Tagged ‘Japan Airlines’

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International Airlines Group eyes bmi takeover

Monday, June 13th, 2011

International Airlines Group boss, Willie Walsh, has expressed an interest in taking over bmi if owners Lufthansa are ready to negotiate. Since moving to the top job at IAG from British Airways after the flag carrier merged with Iberia, Mr Walsh has been on the look out for possible mergers or acquisitions. Speaking in Singapore during a summit of the International Air Transport Association, he said he could confirm that IAG is interested in the carrier, but it was really up to Lufthansa.

One of the reasons IAG is interested in bmi is its landing and take-off slots at Heathrow where Walsh’s airline is based. As well as bmi, Mr Walsh also said he was pursuing a tie-up with Japan Airlines within the Oneworld Alliance. Anti-trust regulators have just confirmed approval for a similar deal between Lufthansa and All Nippon Airways.

British Airways also said it planned to work on rebuilding consumer confidence in its brand after an 18-month fight with its cabin crew. This included a total of 22-days of industrial action which is said to have cost the carrier around £150 million.

Relations between the airline and the Unite union appeared to thaw considerably following Mr Walsh’s departure and the arrival of Keith Williams to the chief executive role. Mr Williams said that he had since spent a great deal of time with BA’s cabin crew.

He added that it was now time to show BA’s loyal customers that the troubles are over and that rather than looking to the past the airline was committed to moving forward.

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Qantas unlikely to become a British Airways partner

Friday, May 13th, 2011

Following the collapse of merger negotiations in 2008 between British Airways and Australian carrier Qantas, International Airlines Group chief executive, Willie Walsh, has ruled out the possibility that they will be reopened. He said that, at the time, the synergies between the two flag carriers were ideal, but that leaks about the negotiations had scuppered the process.

At the end of last year, Mr Walsh said IAG would be looking to expand through tie-ups with other international carriers or through takeovers. He added that a list of 12 potential candidates had been drawn up, without releasing further details. Many industry insiders said at the time that Qantas was likely to be high on that list. Other possibilities included American Airlines, Cathay Pacific, Finnair, Japan Airlines and Chilean airline LAN.

Recently, Portugal’s TAP has been mooted as a possible acquisition. Although Mr Walsh denied having any discussions with the Portuguese government about the flag carrier, it is believed that the airline will be put up for sale as the country continues to battle its financial problems.

Mr Walsh predicts that as the price of oil remains high many airlines will be forced to seek partnerships in order to survive. He said that low-cost carriers were most at risk because jet fuel accounted for such a large percentage of their operating costs.

He pointed out that budget airlines were also unable to take advantage of the recovery of the cargo industry and the return of passengers willing to pay for premium class seats.

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British Airways keen to cement Japan Airlines partnership

Friday, April 1st, 2011

International Consolidated Airlines Group boss Willie Walsh has said the British Airways will continue to run a full service to Japan following the devastating earthquake and tsunami which hit the north of the country earlier last month. He has also confirmed that the carrier is interested in cementing its links with Japan Airlines following its recent emergence from bankruptcy protection.

The state run Enterprise Turnaround Initiative, responsible for bailing the carrier out, has announced its intention to sell its controlling share of the company. Walsh has consistently maintained that he wishes to grow IAG by merging with other international airlines and has already had meetings with banks and Japan Airlines’ bosses.

The announcement follows a decision by All Nippon Airways to enter into a venture with Europe’s second largest carrier Lufthansa. Peter Harbison, of the Centre for Asia Pacific Aviation, said a tie-up would make good business and strategic sense.

According to spokeswoman for Japan Airlines, Sze Hunn Yap, the company is keen to follow up a number of ideas with BA about how the pair can cooperate. As both are members of the Oneworld alliance there are already codeshare agreements in place. Japan Airlines, as part of its bankruptcy protection agreement, has already managed to secure financing and has retired aircraft and cut its workforce by around a third.

The Tokyo-based carrier is due to finalise a deal with American Airlines which will see increased cooperation on transpacific services. Walsh said he would like to see a similar tie-up with BA on routes between Europe and Asia.

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American Airlines union to enlist global help

Friday, February 25th, 2011

The largest union representing the interests of workers at American Airlines is hoping to exert added pressure on the carrier to reach a deal over contracts by joining up with other unions under the Oneworld alliance banner. The Transport Workers Union is hoping that a coalition will help to conclude negotiations started in November 2007.

The group said in a news conference that it aims to encourage union members working for other Oneworld airlines including Japan Airlines and British Airways to picket American Airlines’ desks in their respective countries.

A meeting of some of the union heads is scheduled to take place in April in Washington. The discussions will involve how best to manage the coalition and how to develop plans for the long-term. Air transport international vice president of the Transport Workers Union, Garry Drummond, said he was keen to see some real movement. He added that a labour council formed on a global scale would have the ability to make a striking difference.

Oneworld currently has 12 member airlines from around the world. American Airlines is still to issue a statement concerning the union’s plans. Bob Zimmerman, head of Transport Workers Local 565, said as well as being able to exert added pressure on airlines on behalf of their workers, the unions would also be able to work out strategies to boost the revenues of Oneworld members.

The Transport Workers Union represents around 22,000 American Airlines employees and is currently working to secure contracts for ground handing and maintenance staff at American Airlines’ hubs across the US.

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Global alliances will allow airlines to grow

Tuesday, October 6th, 2009

In an attempt to expand business airlines around the word which have been suffering because of a lack of passengers, rising fuel prices and a poor global economy are now looking to build partnerships with other airlines.

At the moment there is a bidding war going on between American Airlines and Delta who are trying to form tie ups with beleaguered Japan Airlines. The fact that the two U.S. carriers are fighting over Japan Airlines, which is in an awful lot of trouble at the moment, shows how much importance is being placed in forming global alliances. The domestic market is showing little sign of any immediate recovery and therefore airlines need to look to the international markets.

There are already alliances in place between airlines like oneworld and SkyTeam. However these alliances were made so that partners could offer passengers more choice in destinations. Analysts predict that the new alliances will be more about sharing revenues and staff and pooling resources whilst coordinating flights.

Alliances are seen by many to be far more attractive than straightforward takeovers because they do not require companies to spend large amounts of money on restructuring and relocation. Global alliances will also put airlines in a stronger position when it comes to dealing with travel organizations, airports and aircraft manufacturers.

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Minister declares that Japan Airlines will not be bankrupted

Monday, September 28th, 2009

There was a ray of hope for Japan Airlines at the weekend when Seiji Maehara, the Japanese Land, Infrastructure and Transport Minister declared that it would be impossible for him to force the largest airline in Asia into bankruptcy. Japan Airlines is in dire straits at the moment having lost around $1 billion in the second quarter this year. Forecasts for losses for the current fiscal year ending March 2010 are a phenomenal $701 billion at present.

The airline has been looking for financial support from the Japanese tax payer recently and in June this year took a loan from the Development Bank of Japan for $668 million.

According to reports the president of Japan Airlines, Haruka Nishimatsu told the transport minister at a meeting last week that the airline would have to raise somewhere in the region of $5 billion before year end in March 2010 to cover up-coming debt repayments. Nishimatsu allegedly told Maehara that two of the ways he would try to start raising the cash would be by selling off the in-flight catering arm of Japan Airlines and looking into some sort of pension restructuring.

Maehara says that he felt the government had to step in and create a restructuring plan for Japan Airlines because plans by the airline itself were not sufficient. He said that his government appointed team should be in a position to give advice on how to proceed by the end of October.

At present Japan Airlines is still thought to be in talks with America’s Delta Airlines and American Airlines as well as Air France-KLM about potential investment tie-ups.

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American Airlines to sell 30 million shares

Tuesday, September 22nd, 2009

American Airlines are planning their second move in less than a week to increase the company’s liquidity. AMR Corp who own American Airlines have said that they will sell off 30 million shares in common stock and issue $250 million in convertible debt to be due in 2014.

AMR Corp has said that the money raised will be put towards general corporate purposes. However the airline is believed to be trying to prevent a tie up between rival carrier Delta Airlines and Japan Airlines. The move to free up cash may very well be linked with talks the airline has been engaged in with Japan Airlines, and comes ahead of a possible deal. AMR Corp has refused to comment.

Analysts say that it is probably a good time for AMR Corp to offer stock as it is believed that the American airline industry has finally turned the corner. Experts say that the drop in passenger numbers may well be leveling out and investors are now turning their attention back to the airline industry. Bill Warlick, an analyst at Fitch Ratings said that although the airline industry was getting better, he was cautious about using the term snap back, warning that the most profitable area of the industry, the business sector was still lagging behind the current rate of economic recovery.

AMR Corp have said that depending on how the initial offering of stock goes, it might consider upping its offering of shares by another 4.5 million and offering another $37.5 million in convertible debt.

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American wants Japan Airlines to stay in oneworld alliance

Monday, September 21st, 2009

Japan Airlines is being forced to reevaluate its business model according to analysts, a situation that would have been unthinkable for Asia’s biggest airline just a few years ago. It is no secret that the carrier is in talks with both American Airlines and Delta Airlines about a possible tie up which would involve a large cash injection from either one of the U.S. carriers to allow the Japanese airline to stay alive.

Japan Airlines has not only been hit hard by the recession but a change in Japanese policy has seen a rise in other airlines competing for customers. The open skies treaty with the U.S. will also mean the airline will face tougher competition in the future.

Japan Airlines Chief Executive, Haruka Nishimatsu has refused to say which of the U.S. airlines Japan is in discussion with, but if Delta is chosen as a partner it would mean a departure for Japan Airlines from the oneworld alliance it is currently a member of. It would be required to join Delta’s SkyTeam group. British Airways have allegedly spoken to Japan Airlines and asked them not to consider leaving oneworld as they are still seen as a very valuable member.

American Airlines is said to be desperate to keep Japan Airlines under the oneworld umbrella as it shares flight codes with the carrier. It has warned Japan that if it does decide to move then it will end up losing revenue whilst trying to get regulators to hammer out new commercial arrangements for the airline.

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Airline industry still in a shocking state

Wednesday, September 16th, 2009

The International Air Transport Association has revised its forecasts for losses across the world’s airline industry and pushed the predicted figure up from $9 billion to $11 billion. Airlines across Europe and North America are expected to see at least double the initial predicted losses. North American carriers were expected to lose $1 billion but the figure looks like it will now be in the region of $2.6 billion by the end of the year and European carriers will probably lose $3.8 billion, significantly more than the earlier forecast of $1.8 billion.

It seems that the early signs of economic recovery are doing little to bolster the airline industry which continues to find itself crippled by fuel prices and a lack of demand from passengers.

The International Air Transport Association has also said that it could be another three years before airlines recover to the point where revenues are up to the levels of 2008 and says that the losses will definitely continue into 2010 with figures of $3.8 billion being suggested.

Although Japan Airlines has just announced that it will be cutting 6,800 jobs and looking for international investment in order to stay afloat it was predicted that the industry in the Asia-Pacific reason would fare a little better than the west because customers had felt slightly less extreme effects from the global downturn. A loss of $3.6 billion is predicted for this year but a return to profit is cautiously expected next year.

However there was good news for carriers in the Middle East whose losses were adjusted down from $1.5 billion to just $500 million.

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Delta puts in offer to Japan Airlines as American hold talks

Monday, September 14th, 2009

Japan Airlines, who are under an increasing amount of pressure from the powers that be to reduce costs, prevent further losses and generally stabilize their accounts, had been meeting with American Airlines officials to discuss a possible transpacific partnership when American learnt that rivals, Delta Airlines, had offered to pump somewhere in the region of $300 million into Japan Airlines in return for it leaving the Oneworld Alliance and coming over to Delta’s SkyTeam. The Oneworld alliance contains American Airlines along with British Airways and Qantas.

The move could now see a bidding war breakout between American and Delta.

Japan Airlines is Asia’s largest airline in terms of revenue but it has been struggling and saw losses in the last quarter of around $1 billion. An overhaul of the company and its management is expected to result in selling off of assets, job cuts and a reduction in routes. The company has been looking for investors to help it with its financial problems.

The moves by American and Delta coincide with Japanese and U.S. discussions on an open skies agreement aimed at making it easier for Japan and the U.S. to have access to each other’s hub airports. Insiders have said that American will definitely want some sort of agreement in place with Japan Airlines before any accord is signed between the two nations.

American representatives will stay in Japan this week to continue talks. Although the investment from American may not be enough to sort out Japan’s difficulties it might send out a strong signal to other investors that the airline is a safe bet.

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