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Earlier today in Tokyo, executives of JAL and the Japanese Transport Ministry said that the carrier would remain a member of the oneworld global alliance, anchored by AMR Corp.'s (NYSE: AMR ) American Airlines and including British Airways and LAN Airlines (NYSE: LFL ) .
"[JAL] decided to prioritize our immediate goal, which is to do whatever it takes to restructure this company in the first year; so we avoided the risk that migration [to Delta] posed of losing our current customers," Dow Jones quotes Daiji Nagai, vice president of the carrier's corporate planning division, as saying during a press briefing. JAL filed for bankruptcy protection last month.
In losing Japan Airlines as a partner, Delta forfeits what might have been a lucrative code-sharing deal. Passengers would book JAL flights through Delta and vice versa. The result might have been greater access to high-revenue routes between Europe and Asia.
Asia-Pacific is an important region for carriers. Passenger traffic there surpassed North American traffic in 2009, the International Air Transport Association reported earlier this month. The group expects overall Asia-Pacific traffic to rise 33%, to 864 million passengers, between now and 2013.
That's understandable. China and India are emerging economies with cross-border business aspirations through emerging powerhouses such as Infosys (Nasdaq: INFY ) and China Mobile (NYSE: CHL ) . U.S. carriers will do what they can to get a portion of the international ferrying work that's sure to be had.
And yet the Asia-Pacific market offers no guarantees. UAL Corp.'s (Nasdaq: UAUA ) United blamed a disproportionate decline in Pacific unit revenue for a broader decline in operating revenue in its third-quarter report.
Even so, United is unlikely to loosen its grip on routes to Tokyo and Osaka, or give up its code-share deal with Shanghai Airlines. The U.S. majors want as much of Asia's air traffic as they can get. Delta, for its part, will have to wait.
Is this an issue for Delta? Or is the $1 billion it had pledged to JAL in exchange for a partnership better spent elsewhere? Make your voice heard using the comments box below.