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Delta's Anderson hypes alliance with JAL - Minneapolis / St. Paul Business Journal:

The CEO of Delta Air Lines Inc. Friday touted the advantages a potential alliance with struggling Japan Airlines Corp., and said regulatory approval is possible if a deal can be reached.
In a recorded message to employees, Richard Anderson said an alliance with JAL would have far greater long-term benefits for the Japanese carrier. Delta has been trying to lure Japan Airlines out of its alliance with American Airlines-led oneworld with promises of $1 billion in equity and assistance from the SkyTeam partnership.
“There’s no doubt that Delta and SkyTeam are the strongest partners for Japan Airlines,” Anderson said.
Delta's proposal reportedly includes $500 million from SkyTeam, a $300 million guarantee from Delta, $200 million in asset-backed funding and $20 million for transition costs.
JAL has recently slashed routes and has been seeking additional assistance from the Japanese government. Reuters, citing the Nikkei business publication, said JAL would seek $1.1 billion in government bridge financing as early as Nov. 24.
Both Fort Worth, Texas-based American (NYSE: AMR) -- JAL’s current partner in the oneworld alliance -- and Delta push to retain a partnership that is strategic in terms of the routes and connections gained in Asian markets.
American has said it’s negotiations with JAL are at a further advanced state than Delta’s offer.
On Friday, Standard & Poor’s said a deal, or lack thereof, with JAL would not affect the credit ratings of American or Delta.
Anderson said a JAL addition to SkyTeam would give the alliance a 46 percent marketshare to Japan, slightly more than All Nippon Airways and Continental Airlines, which is also seeking regulatory approval. Antitrust immunity has been approved for alliances with as much as 70 percent marketshare, including American’s venture with Lan Chile Airlines.
The DOT, he said, had approved all previous antitrust immunity applications.
Beyond dollars, Anderson said a marketing, route-planning and revenue-sharing tie-up with Delta’s team would have far reaching competitive advantages as well.
Atlanta-based Delta (NYSE; DAL) gained a hub in Tokyo with its merger with Northwest Airlines, and is the dominant U.S.-based carrier to Asia. The Delta-Northwest tandem carriers about 7,500 passengers daily between the U.S. and Japan, while American and JAL fly only about 1,300, Anderson said.
SkyTeam partners Air France-KLM Group and Alitalia also are the top players from Europe to Japan.
“If JAL stays in the American relationship it will be relegated to a permanent third place position in the Japan-US market,” Anderson said.
On Nov. 19, the head of the pilots union for Delta-Northwest also endorsed the partnership.
Lee Moak, chief of the Delta Air Line Pilots Association, said SkyTeam “is without question the strongest long-term strategic partner for Japan Airlines.”
The teaming would enhance job security among JAL pilots and those of all SkyTeam airlines, he said.
Six of the 10 SkyTeam members already have some form of relationship with JAL, Anderson said.
Delta is the parent company of Eagan-based Northwest Airlines, the dominant airline serving the state of Minnesota.