TPG Capital may pursue a minority investment in stricken Japanese national carrier Japan Airlines alongside US airline operator American Airlines, a source close to the firm has confirmed.
TPG would need an invitation from Japan Airlines and the Japanese government to pursue the deal before further action can be taken.
Thomas Horton, the chief financial officer of AMR Corp, American Airlines’ parent company, told Reuters that TPG had agreed to potentially partner the company on any deal.
“As appropriate and if it were welcomed by Japan Airlines and the government of Japan, TPG could also be part of a comprehensive recovery plan,” Horton told reporters in Tokyo. An unnamed source told Bloomberg American Airlines and TPG could invest at least $300 million in the Japanese airline.
TPG could also be part of a comprehensive recovery plan.
It has been reported that the Japanese government has agreed to support the struggling airline through the offering of a bridge loan. While the size of the loan has not been made public, two sources told Reuters the Development Bank of Japan is to offer a ¥100 billion ($1.1 billion; €743 million) line of credit and private banks will put up another ¥25 billion.
Another US airline, Delta Airlines, has also proposed an investment in the loss-making Japanese carrier. Japan Airlines is Asia’s largest carrier by revenues and both American Airlines and Delta Air Lines are keen to get a stronger foothold in Japan, Reuters noted.
Japan Airlines is a member of the Oneworld alliance of airlines, the same network to which American Airlines belongs. According to the report, American Airlines does not want Japan Airlines to join Delta, which belongs to the rival SkyTeam group of airlines.
JAL: TPG considers coming on board
In August 2007, the firm won a bid to acquire Midwest Air Group in a deal worth approximately $450 million. However, in the same year, TPG was part of a Macquarie-led consortium that failed in its A$11.1billion ($9.2 billion, €6.8 billion) bid to acquire Australian airline Qantas. The consortium failed to secure the 50 percent shareholder acceptance needed for its bid.
Also in 2007, a consortium including TPG and British Airways withdrew its bid for Spanish airline Iberia after pressure from local bank Caja Madrid, which made an offer to become the largest shareholder in the airline.
TPG declined to comment.