The race to control the skies in Japan and the gateway to Asia went into overdrive yesterday as American Airlines raised its capital injection to offer Japan Airlines to $1.1 billion and All Nippon Airways solidified its alliance with United and Continental.

The move by the American carrier, which involved a sweetening of the offer last month, is expected to spark a bidding war for the right to code share on JAL’s many routes from Japan to the rest of Asia.  JAL has recorded significant losses as of late and is desperate to secure cash to renew its aging fleet.

The newly increased offer by American Airlines of capital, which it is mounting jointly with the private equity group TPG, would keep JAL locked into the Oneworld airline alliance, leaving Delta and SkyTeam allies without a Japanese partner.

The combined offer from American and TPG is structured to flood Japan Airlines with about $1.8 billion of capital over a period of years, with the American’s demanding that the government guarantees that would allow it to negotiate jointly with the airline for new routes if Japan and the US sign an open-skies agreement this month.

Chief financial officer of American Airlines, Tom Horton, said a healthy and stronger Japan Airlines is good for the country, its economy and the travelling public, and Oneworld, American and TPG were the partners to help make it happen.

It has also emerged that All Nippon Airways was planning to integrate its flight operations between Japan and the US with United and Continental, effectively creating a powerful bloc when it comes to deciding future routes under an open-skies deal. All three airlines are part of the Star Alliance, which member airlines from around the world have been closely watching developments in Japan.

The race to control the skies in Japan and the gateway to Asia went into overdrive yesterday as American Airlines raised its capital injection to offer Japan Airlines to $1.1 billion and All Nippon Airways solidified its alliance with United and Continental.

The move by the American carrier, which involved a sweetening of the offer last month, is expected to spark a bidding war for the right to code share on JAL’s many routes from Japan to the rest of Asia.  JAL has recorded significant losses as of late and is desperate to secure cash to renew its aging fleet.

The newly increased offer by American Airlines of capital, which it is mounting jointly with the private equity group TPG, would keep JAL locked into the Oneworld airline alliance, leaving Delta and SkyTeam allies without a Japanese partner.

The combined offer from American and TPG is structured to flood Japan Airlines with about $1.8 billion of capital over a period of years, with the American’s demanding that the government guarantees that would allow it to negotiate jointly with the airline for new routes if Japan and the US sign an open-skies agreement this month.

Chief financial officer of American Airlines, Tom Horton, said a healthy and stronger Japan Airlines is good for the country, its economy and the travelling public, and Oneworld, American and TPG were the partners to help make it happen.

It has also emerged that All Nippon Airways was planning to integrate its flight operations between Japan and the US with United and Continental, effectively creating a powerful bloc when it comes to deciding future routes under an open-skies deal.

All three airlines are part of the Star Alliance, which member airlines from around the world have been closely watching developments in Japan.