*Source: DTN News / Centre For Aviation
(NSI News Source Info) TOKYO, Japan - October 7, 2009: Japan Airlines (JAL) has reportedly deferred talks with Delta Air Lines and American Airlines over possible equity investments. This will allow 
JAL (and the government) to focus on developing a restructuring plan with a government-backed task force, according to the Kyodo newspaper.
The move, if confirmed, would suggest the heavily indebted and loss-making JAL has gained some reassurances the government will guarantee the carrier’s funding arrangements at least until the end of the current financial year.
For American Airlines – and the oneworld alliance its represents – the report, if confirmed, provides a welcome delay as a cold winter approaches, reducing the need for an imminent capital outlay, while continuing current alliance linkages.
For the cashed-up Delta, the move is a potential disappointment, as the SkyTeam Alliance has no partner in Japan and US-Japan bilateral open skies talks are still on track for conclusion by the end of 2009.
It is quite possible that the extraordinarily (by non-Japanese standards) complex network of JAL's subsidiaries and associated companies would actually create a nightmare for any sort of due diligence.
In this report, we review some of the features of Japan Airlines’ (JAL) operations that, if addressed by the restructure, could make it a more attractive acquisition target.
Unwieldy structure – 286 subsidiaries and affiliates
JAL Group’s unwieldy structure involves, at last count in its 2008/09 Annual Report, some 203 consolidated and non-consolidated subsidiaries and 83 affiliates. Created over many years, through acquisitions in the good times and via restructuring exercises in the past, JAL’s arcane subsidiary and affiliate structure has ensured continued employment for thousands of JAL workers. But it has also created a massive management burden and will be complex to unravel.
JAL’s major consolidated subsidiaries are as follows:
Japan Airlines International Co Ltd
Japan Transocean Air Co Ltd
J-Air Co Ltd
JALWAYS Co Ltd
JAL express Co Ltd
Japan Air Commuter Co Ltd
JALPAK Co Ltd
JAL tours Co Ltd
JAL hotels company Co Ltd
JAL Group’s structure comprises five main branches (Air Transportation, Airline-related, Travel Services, Credit Card/Leasing Services and ‘Other’ business), as well as its Hotel/Resorts business and a Wholesaling/Retailing arm.
JAL (and the government) to focus on developing a restructuring plan with a government-backed task force, according to the Kyodo newspaper.
The move, if confirmed, would suggest the heavily indebted and loss-making JAL has gained some reassurances the government will guarantee the carrier’s funding arrangements at least until the end of the current financial year.
For American Airlines – and the oneworld alliance its represents – the report, if confirmed, provides a welcome delay as a cold winter approaches, reducing the need for an imminent capital outlay, while continuing current alliance linkages.
For the cashed-up Delta, the move is a potential disappointment, as the SkyTeam Alliance has no partner in Japan and US-Japan bilateral open skies talks are still on track for conclusion by the end of 2009.
It is quite possible that the extraordinarily (by non-Japanese standards) complex network of JAL's subsidiaries and associated companies would actually create a nightmare for any sort of due diligence.
In this report, we review some of the features of Japan Airlines’ (JAL) operations that, if addressed by the restructure, could make it a more attractive acquisition target.
Unwieldy structure – 286 subsidiaries and affiliates
JAL Group’s unwieldy structure involves, at last count in its 2008/09 Annual Report, some 203 consolidated and non-consolidated subsidiaries and 83 affiliates. Created over many years, through acquisitions in the good times and via restructuring exercises in the past, JAL’s arcane subsidiary and affiliate structure has ensured continued employment for thousands of JAL workers. But it has also created a massive management burden and will be complex to unravel.
JAL’s major consolidated subsidiaries are as follows:
Japan Airlines International Co Ltd
Japan Transocean Air Co Ltd
J-Air Co Ltd
JALWAYS Co Ltd
JAL express Co Ltd
Japan Air Commuter Co Ltd
JALPAK Co Ltd
JAL tours Co Ltd
JAL hotels company Co Ltd
JAL Group’s structure comprises five main branches (Air Transportation, Airline-related, Travel Services, Credit Card/Leasing Services and ‘Other’ business), as well as its Hotel/Resorts business and a Wholesaling/Retailing arm.
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