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Friday, January 29, 2010

JAL and NYK cargo merger talks stall

Nikkei reports that Japan Airlines and NYK's cargo operations (NCA) merger talks hit a major obstacle. This is mainly due to ETIC wants to sell off JAL's cargo unit.

JAL and NYK started the talk back in August 2009 and are supposed to complete the merge by April 2010. Under the original plan, JAL will spin off JAL Cargo and merge with NCA. JAL will hold 40-50% of the new combined company. But we all know what has happened since then (If not, just read the news on January 19 :P). When ETIC saw JAL Cargo has been losing 20 billion yen a year, they want to get rid of it completely or to keep JAL's share in the new combined cargo company to a minimum. That means NYK has to take over all of JAL's Cargo plans and the 3,000 staff in the cargo subsidiary and NYK opposes that! A senior executive even said "the talks may be broken off"!

This is the first major obstacle we see in the restructuring. Worst case scenario, JAL dumps JAL Cargo. NYK works with ANA (assuming they can get the regulatory approvals). Is this what ANA calls "we need to get stronger while JAL is sick"? LOL

Source: Reuters

Related Post: JAL and NYK starts talking about cargo merger

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