More JAL Poker: American Sees Delta's $1B Bet And Raises A Million More
The game thus far: Japan Airlines let it be known that they would maybe consider leaving oneworld for SkyTeam - thereby devastating American's presence in Tokyo - if the price was right. Delta almost immediately offered $1 billion plus transition expenses if JAL would make the switch. Fast forward a few weeks later and American has made their counteroffer - $1.1 billion plus JAL wouldn't have to worry about transition expenses because there wouldn't be any transition.
It's not a "far superior" offer, which is the soundbite that American CFO Tom Horton is handing out. But we checked our calculators, did a little subtraction, and it does indeed seem to be straightforwardly more money. Plus JAL would be spared not only transition costs but all of the non-monetary problems that were on display during Continental's move to Star Alliance. Here are a few more details of American's counteroffer:
American Airlines upped the ante in the tug-of-war over Japan Airlines, vowing Thursday to lead a $1.1 billion investment in the struggling carrier to prevent it from falling into the orbit of rival Delta... Horton and his team asserted that if JAL enhances its links with American, over a 10-year period it would gain additional revenues of some $700 million.
The rest of the article has a ton of background and analysis, up to and including how a declining dollar is deflating both Delta's and American's offers. JAL is said to be considering their options and most things are up in the air. The only thing that's certain is that this fiasco will be dragging on a few more weeks, which means more entertainment for everyone who's not Delta or American.
[Photo: Denniss / Wiki Commons]
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