newswatcher
12th Nov 2001, 12:53
From the Beeb:
"Japan's leading airline, Japan Airlines, and third-ranked Japan Air System have started merger talks to form the world's sixth largest carrier by autumn next year.
"No basic agreement has been reached so far, however, there have been talks between the top management of both companies along such lines," JAL said in a statement.
JAS added in a separate statement the two were studying alliances but nothing specific had been decided.
The talks come as Japan's established airlines face increasing domestic competition from low-cost carriers and during a worldwide aviation industry slump after the attacks on the US.
Belgium's Sabena national carrier last week became the first European Union flag carrier to go bust, while Canada 3000 was declared bankrupt on Sunday.
Investors greeted the news from Japan by pushing up shares in JAL by 4.9% and JAS up by 3.03%.
Japanese Transport Minister Chikage Ogi told a parliament the merger was due next autumn, adding she was carefully monitoring how the move would affect the industry's competitiveness.
It would be the first major restructuring of Japan's aviation sector since 1971 when JAS, then known as Toa Domestic Airlines, was created through a merger.
JAL said last month it expected a group net loss of 40bn yen ($332.4m) for the year to March.
It is thought by analysts to be the Japanese carrier acutely affected by the fall in overseas travel because it offers the most international flights.
There are expected to be only limited job losses from a deal.
In the maintenance area, JAL uses Boeing planes, while JAS uses Airbus and McDonnell Douglas.
Also few savings will be made on administrative costs since the two companies would continue to exist under a holding company.
JAL already owns an 8.25% stake in JAS and has engaged in several joint projects with it to cut costs."
"Japan's leading airline, Japan Airlines, and third-ranked Japan Air System have started merger talks to form the world's sixth largest carrier by autumn next year.
"No basic agreement has been reached so far, however, there have been talks between the top management of both companies along such lines," JAL said in a statement.
JAS added in a separate statement the two were studying alliances but nothing specific had been decided.
The talks come as Japan's established airlines face increasing domestic competition from low-cost carriers and during a worldwide aviation industry slump after the attacks on the US.
Belgium's Sabena national carrier last week became the first European Union flag carrier to go bust, while Canada 3000 was declared bankrupt on Sunday.
Investors greeted the news from Japan by pushing up shares in JAL by 4.9% and JAS up by 3.03%.
Japanese Transport Minister Chikage Ogi told a parliament the merger was due next autumn, adding she was carefully monitoring how the move would affect the industry's competitiveness.
It would be the first major restructuring of Japan's aviation sector since 1971 when JAS, then known as Toa Domestic Airlines, was created through a merger.
JAL said last month it expected a group net loss of 40bn yen ($332.4m) for the year to March.
It is thought by analysts to be the Japanese carrier acutely affected by the fall in overseas travel because it offers the most international flights.
There are expected to be only limited job losses from a deal.
In the maintenance area, JAL uses Boeing planes, while JAS uses Airbus and McDonnell Douglas.
Also few savings will be made on administrative costs since the two companies would continue to exist under a holding company.
JAL already owns an 8.25% stake in JAS and has engaged in several joint projects with it to cut costs."