Delta meets with minister on JAL

Executives of Delta Air Lines Inc. met Wednesday with transport minister Seiji Maehara to trumpet the long-term benefits of forming capital ties between the U.S. carrier and Japan Airlines Corp. to help its turnaround.

Delta, the world's biggest commercial carrier, has offered JAL a $1.02 billion financial package with global SkyTeam alliance members, including a $500 million investment, to woo the carrier to switch from the rival oneworld alliance with American Airlines Inc.

"In order for any restructuring to be successful, a company has to have top-line growth, market expansion and more passengers," Delta Chief Executive Officer Richard Anderson told reporters following the meeting with Maehara.

"We give the opportunity to make certain that JAL holds its rightful place as the leading airline in Asia," he added.

JAL, headed for its fourth annual loss in five years, is currently seeking broad financial support from a government-backed corporate turnaround body. But Anderson indicated that Delta is willing to back JAL even if it undergoes bankruptcy proceedings.

"We are committed to our relationship for many, many decades. Our partnerships are through thick and thin," he said.

At the outset of the meeting, Maehara said he was certain that JAL would be able to reconstruct itself but added the government has a "strong interest" in developments on capital tieup talks between JAL and foreign carriers, especially at a time when Japan and the United States are drawing close to concluding an open skies accord.

"Since it is a private company, it is up to JAL to decide which global airline company to partner with," Maehara said. "But as JAL will use an entity using taxpayers' money (to turn itself around), we will watch closely what JAL will choose to do."

Maehara is also expected to meet next week with executives of American Airlines, which has also said it is prepared to invest up to $1.1 billion in JAL, together with its oneworld members and private-equity firm TPG Inc., to prevent JAL's defection.

The world's two biggest airlines have raised their stakes for JAL as they seek to tap into lucrative Asian routes.

"Our focus is Tokyo and will remain Tokyo forever because it's really the center of where everything goes on in Asia from an aviation standpoint," Delta's Anderson said.