American Airlines and TPG Looking to Invest in JAL
American Airlines and private equity firm TPG are looking to join hands for an investment in Japan Airlines which is currently struggling to survive. Asia's biggest carrier by sales, JAL has been struggling with a $15 Million debt, a large pension deficient and many unprofitable routes, in addition to the current economic downturn and a significant fall in number of passengers. AA and TPG's investment will give them a stake in the Asian airline.
Presently, JAL is seeking its fourth state bailout since 2001 and the Japanese Government has shared plans of enlisting a state bank to offer bridge loans to the carrier to prevent it from running out of money.
"We stand ready to invest in JAL", Thomas Horton, American’s Chief Financial Officer said. "It’s all dependent on the nature of a comprehensive recovery plan for the carrier".
Despite the fact that JAL is suffering massive losses and facing a potential melt-down, it is being wooed by both American Airlines and Delta Air Lines as a share in it would mean expansion into Asia and a strong foothold in Japan, one of the world's largest and most successful economies.
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