Business NEWS

Japan Airlines hired Merrill Lynch as Adviser- BA also in talks with JAL

By Amarendra Bhushan for CEOWORLD Magazine Updated:September 21, 2009

Japanese Transport Minister Seiji Maehara will meet with Japan Airlines Corp. President Haruka Nishimatsu on Sept. 24 to discuss the company’s restructuring plan. Japan Airlines needs to cut costs and regain the confidence of creditors.

Japan Air, which has received three government bailouts since 2001, is in also talks with Delta Air Lines Inc. and Air France-KLM on selling stakes.

British Airways said Friday that it has gotten involved in American Airlines’ talks with Japan Airlines as part of an effort to keep JAL in the oneworld fold,, State-owned Development Bank of Japan, which has already made 235 billion yen ($2.6 billion) in loans to the Tokyo-based carrier, could provide more funds.

Japan Airlines Corp., hired Merrill Lynch Japan Securities Co. to advise on its search for partners and investments.

Appointed Bank of America Corp.’s Merrill Lynch to evaluate the carrier’s value and select a partner who can help replenish its capital, said the people, who asked not to be identified because they aren’t authorized to discuss the deal publicly.

Overseas carriers including American Airlines, Delta Air Lines Inc. and Air France-KLM are considering investments in Japan Air, also known as JAL. Delta and American, a unit of AMR Corp., are both in talks to invest in Japan Air, Hirotaka Yamauchi, a member of the government panel formed to help restructure the airline, said on Sept. 15.

BA on Friday confirmed to The Wall Street Journal that it also is engaged in talks with JAL, which a spokesperson said is “valuable to us as part of oneworld.” The paper reported that other oneworld carriers are involved in talks about possible further cooperation, driven by fear that a JAL/DL deal could lead it to jump to SkyTeam, which lacks a Japanese affiliate..

Meanwhile, JAL’s restructuring plan may have to be revised in the wake of the Democratic Party of Japan’s decisive defeat of the long-entrenched Liberal Democratic Party in national elections. The new government is reviewing LPD policies and financial help for JAL appears to be part of the examination.

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