Jaunted

Delta Air Lines and its alliance partners said Wednesday that they were making a $1 billion offer to lure money-losing Japan Airlines from its affiliation with American Airlines. Delta (DAL) is 'by far the strongest partner for Japan Airlines,' Delta President Edward Bastian told reporters here. The offer escalates a tug of war between Delta and American for a minority stake in Japan's flagship airline, which both U.S. carriers see as a greater entryway into expanding in Asia. JAL is particularly attractive to both airlines and their partners because of its extensive routes in Japan and China.

That line about Delta being the stronger partner, which means being a more efficient partner over more routes, is particularly hurtful to AA because it's objectively true. That's at least what independent airline groups are publishing, and we're obviously in no position to comment one way or another. We do know that most of JAL's public statements, which up until now have expressed reluctance, have been in the form of "well we're not sure... the transition would be so expensive..."

Here's where things get really interesting: the billion dollars that Delta is offering isn't even going to the transition. SkyTeam is covering all those costs, which should come in at $20 million give/take. The additional billion is just a straight bribe, divided up between $500 million in capital investment, $300 million in short-term revenue guarantees, and $200 million in financing for JAL. Somebody wants this deal to happen very, very much, and we'll continue to keep watch.

[Photo: Bud (Budphoto1) / Wiki Commons]

Related Stories:
· Delta offers $1B to get Japan Airlines to switch alliances [USA Today]
· Delta Coverage [Jaunted]
· Japan Airlines [Jaunted]