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UNCLAS SECTION 01 OF 11 TOKYO 002674
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DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.
E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 11/19/09
INDEX:
1) Top headlines
2) Editorials
3) Prime Minister's daily schedule (Nikkei)
Futenma relocation:
4) MOD proposes curtailment of training at Kadena as a condition for
relocating Futenma facility to Nago (Nikkei)
5) Fukushima concerned expeditious decision might be hasty decision
(Nikkei)
6) Japanese government under mounting pressure at home and from
abroad to reach early decision on Futenma (Yomiuri)
7) Hatoyama asked Obama to trust him; the president said OK
(Yomiuri)
8) MOD formulates proposals to promote implementation of existing
plan for Futenma facility relocation (Yomiuri)
9) Discussion of Futenma relocation outside Japan also necessary
(Tokyo Shimbun)
Afghanistan:
10) Okada: No resumption of Indian Ocean refueling mission
(Akahata)
11) State Secretary for Foreign Affairs holds talks with Afghan
president (Nikkei)
Defense & security:
12) Contingency plans for use of Kadena one reason U.S. military
opposes the air base's integration with Futenma facility (Tokyo
Shimbun)
13) Okada: Release of report on investigation of "secret nuclear
accord" difficult this year (Nikkei)
14) Police request U.S. military's cooperate in having sergeant
appear for questioning about hit-and-run death (Sankei)
Politics:
15) Lower House speaker Yokomichi says Futenma issue is Prime
Minister's responsibility (Sankei)
16) LDP and Komeito can't get together or part with each other
(Mainichi)
17) Kamei declares support for coalition (Yomiuri)
Japan Airlines reconstruction:
18) Two U.S. carriers in tug-of-war for tie-up with JAL (Nikkei)
Articles:
1) Topheadlines
Asahi:
Third-party commission report says JR West information leakage
caused by corporate culture of giving top priority to the interests
of the organization
Mainichi:
Ex-secretaries of DPJ Lower House member Ai Aoki forced to make
political donations by Ozawa's secretary
Yomiuri:
34-year old woman to be re-arrested for murder cases in Saitama,
Chiba in December
Nikkei:
TOKYO 00002674 002 OF 011
U.S. company Pfizer to enter Japanese market for generic drugs
Sankei:
Ex-chairman of Mizutani Construction Company claims 50-million-yen
donation given to Ozawa, could be bribe for winning dam-project
contract
Tokyo Shimbun:
U.S. strategy for contingency in Japan revealed; possible factor
behind difficulty of merging Futenma with Kadena Air Base
Akahata:
Big businesses hold reserves even under serious economic recession;
100 PERCENT increase in 10 years to 429 trillion yen
2) EDITORIALS
Asahi:
(1) Government project screening: Great accomplishment should lead
to next steps
(2) Party leaders' debate: Prime Minister's evasiveness is
lamentable
Mainichi:
(1) Outrageous that party leaders' debate has not been held even
once
(2) White Paper on Crime: Deterioration of "moral consciousness"
Yomiuri:
(1) Appointment of former bureaucrat as National Personnel Authority
commissioner: No problem if merit-based
(2) Regulation of tuna fishing: Need for discipline to enjoy toro
(fatty tuna)
Nikkei:
(1) Are the major banks over the worst in their business results?
(2) Shortage of vaccines is the basic problem
Sankei:
(1) Futenma working group: Do not use this as means to defer
decision
(2) Obama Asian tour: Tolerance of China's military expansion is
regrettable
Tokyo Shimbun:
(1) Appointment of National Personnel Authority commissioner:
Tighten control to eradicate amakudari
(2) Myanmar (Burma): Make the mood for dialogue bear fruit
Akahata:
(1) Easing of day care regulations: Making sacrifices affecting
children amounts to abandoning political responsibility
3) Prime Minister's Official Residence (Kantei)
Prime Minister's schedule, November 18
NIKKEI (Page 2) (Full)
November 19, 2009
09:51 Met Finance Minister Fujii, Parliamentary Secretary of Finance
Furumoto, and Vice Finance Minister Tango, joined by Senior Vice
TOKYO 00002674 003 OF 011
Finance Minister Minezaki, at the Prime Minister's Official
Residence (Kantei).
11:01 Met members of groups calling for the return of the Northern
Territories, including Hokkaido Gov. Harumi Takahashi. Senior Vice
Minister of Cabinet Office Oshima was also present.
11:53 Attended a national local heads' convention held at NHK Hall
in Jinnan.
13:22 Met former Lower House member Tetsundo Iwakuni at the Kantei.
Deputy Chief Cabinet Secretaries Matsuno and Matsui and Advisor
Nakayama were also present.
15:02 Met the finance minister and Administrative Reform Minister
Sengoku. Chief Cabinet Secretary Hirano was also present.
17:02 Met OECD Secretary General Gurria.
18:14 Attended, along with his wife Miyuki, a party commemorating
the 70th anniversary the Japanese Society for Rights of Authors,
Composers, and Publishers (JASRAC).
19:40 Dined, along with his wife Miyuki, at a Park Hyatt Tokyo
Japanese restaurant with fashion designer Hiroko
Koshino, International University of Health and Welfare Professor
Yuji Kuroiwa, and pianist Mari Kumamoto.
22:41 Arrived at his official residential quarters.
4) Futenma relocation to Nago preconditioned on reducing Kadena
training: Defense Ministry
NIKKEI (Page 2) (Abridged)
November 19, 2009
The Defense Ministry decided yesterday to precondition the planned
relocation of the U.S. Marine Corps' Futenma Air Station in Ginowan,
Okinawa Prefecture, to a coastal area of Camp Schwab in the island
prefecture's northern coastal city of Nago on such steps as
curtailing the flight training of fighter jets deployed to the U.S.
Kadena Air Base in order to reduce noise. The Defense Ministry plans
to propose these preconditions in the next meeting of a working
group set up by the Japanese and U.S. governments over the Futenma
issue.
The ministry transmitted the decision yesterday to the prime
minister's office and the Foreign Ministry. Other preconditions
include: 1) consulting on stipulating environment-oriented measures
in the Japan-U.S. Status of Forces Agreement, which provides for the
legal status of U.S. Forces Japan and their personnel, and 2)
cutting down on the Japanese government's burden sharing of costs
for the stationing of U.S. forces in Japan (omoiyari yosan,
literally "sympathy budget)." The ministry wants to obtain public
understanding by drawing concessions to a certain extent from the
U.S. government in return for implementing the current Futenma
relocation plan.
The ministry eyes putting up a 'struggle over conditions' that is
premised on accepting the current plan. This is because U.S.
President Obama has shown a flexible stance of accepting minor
changes to the current plan. "It's possible to adjust a portion of
the plan that is based on the roadmap for the realignment of U.S.
forces in Japan," Obama declared in his recent meeting with Prime
Minister Hatoyama.
Meanwhile, U.S. Secretary of Defense Gates also made a similar
remark when he visited Japan last month. However, the ministry gave
weight to the fact that Obama himself referred to the issue. The
ministry then set about attaching conditions to the relocation of
TOKYO 00002674 004 OF 011
Futenma airfield to Nago.
5) SDP head voices concern about hasty decision over Futenma
NIKKEI (Page 2) (Full)
November 19, 2009
State Minister for Consumer Affairs and Declining Birthrate Mizuho
Fukushima, who heads the Social Democratic Party, one of the ruling
Democratic Party of Japan's two coalition partners, has expressed
concern about the pending issue of relocating the U.S. Marine Corps'
Futenma Air Station in Okinawa Prefecture. "I'm alarmed about the
working group of Japan and the United States saying they will reach
a conclusion promptly," Fukushima said at a press conference
yesterday. "Taking a wrong step will result in reaching a hasty
conclusion and will make it difficult to resolve the problem," she
added.
6) Defense Ministry's amendment proposal calls for accelerating
transfer of Marines to Guam plan, aiming for progress on Futenma
issue
YOMIURI (Page 2) (Full)
November 19, 2009
The Defense Ministry worked out an amendment to the government's
existing plan to reduce the base burden on Okinawa and submitted it
to the Prime Minister's Office and the Foreign Ministry yesterday.
With the proposed amendments, the Defense Ministry aims to move
forward with the current plan to relocate the U.S. Marine Corps'
Futenma Air Station in Ginowan City, Okinawa Prefecture, to a
coastal area of Camp Schwab in Nago City. The government plan
specifies that the transfer of 8,000 U.S. Marines in Okinawa to Guam
and the return of significant land areas south of Kadena Air Base
being used by the U.S. military facilities to Japan will come after
an alternative facility to the Futenma air base is constructed. But
the proposed amendment calls for accelerating the plan to transfer
Marines and part of the plan to return U.S. military facilities.
Once Prime Minister Yukio Hatoyama and Foreign Minister Katsuya
Okada decide to approve the existing plan, the ministry will present
the amendment proposal to the U.S. side as the government's plan,
with the aim of resolving the Futenma issue by the end of the year.
The Defense Ministry in its proposal hints at its willingness to
approve of moving the planned construction site further offshore, as
requested by the Okinawa governor and the Nago mayor. The U.S.
government's indication of its approval of slight changes in the
current Futenma relocation plan is reflected in the ministry's
proposal.
In addition, during the Japan-U.S. summit meeting on Nov. 13, U.S.
President Barack Obama said regarding the roadmap agreed on between
Japan and the U.S. in 2006 for the realignment of U.S. forces in
Japan: "Modifying it is also necessary." Focusing on his flexible
stance, the ministry intends to ask the U.S. to speed up the plan to
transfer Marines and also part of the plan to return military
facilities to Japan.
The amendment further calls for expanding a plan to move training
activities for fighters at Kadena Air Base out of the prefecture. It
also proposes creating an environment clause in the Japan-U.S.
Status of Forces Agreement to allow the central and local
TOKYO 00002674 005 OF 011
governments to enter U.S. military bases if environmental
contamination is caused within the bases and to require the U.S.
military to restore the land it has used to its original state.
The Foreign Ministry also is laying out its own amendment to the
existing plan. If Prime Minister Hatoyama decides to approve the
current plan, the Defense Ministry and the Foreign Ministry are
expected to compile a government plan based on their proposals, and
to present it to the U.S. side during a meeting of the committee of
Japanese and U.S. foreign and defense ministers responsible for the
Futenma relocation issue.
7) Hatoyama said, "Trust me," regarding Futenma issue, and President
Obama replied, "OK"
YOMIURI (Page 2) (Full)
November 19, 2009
During the Nov. 13 Japan-U.S. summit, President Barack Obama called
for the early implementation of the existing bilateral agreement on
the relocation of the U.S. Marine Corps' Futenma Air Station in
Okinawa. In response, Prime Minister Yukio Hatoyama said, "Trust
me," -- an expression that can be taken that he promised the early
settlement of the matter. This was revealed on Nov. 18 by
individuals with knowledge of the exchange.
According to them, the Prime Minister referred to the fact that he
himself had mentioned the option of moving Futenma out of Okinawa or
even out of the country during the campaign for the House of
Representatives election in August. The Prime Minister then said,
"It is a matter that involves great difficulties," and "I would like
to reach a conclusion as soon as possible via the working group (to
be set up by cabinet ministers responsible for foreign and defense
affairs and others)." Then he added, "Trust me." President Obama
replied, "OK."
The President delivered a speech on the following day, Nov. 14, in
which he said: "For the implementation of the bilateral agreement on
U.S. force realignment, we have agreed to move the matter
expeditiously through a joint working group." But the Prime Minister
made the following comment on the night of Nov. 14: "If the
Japan-U.S. agreement is the premise, there is no need to set up a
working group. I did not promise (the U.S. side) that we will reach
a conclusion by the end of the year." The comment sounded negative
about reaching an early settlement. The concern is widespread in
Tokyo that if Japan postpones a conclusion, the relationship of
trust between Hatoyama and Obama will be undermined.
8) Nago mayoral election: Pressure building for early settlement
YOMIURI (Page 2) (Excepts)
November 19, 2009
Pressure on the government to reach an early settlement on the
relocation of the U.S. Marine Corps' Futenma Air Station in Okinawa
Prefecture is building at home and abroad. The U.S. Senate has
passed a budget bill (related to the construction of military
installations) that cuts funding for the transfer of U.S. Marines
stationed in Okinawa to Guam -- approximately 300 million dollars
(about 27 billion yen) - by approximately 70 PERCENT . In the
meantime, in Okinawa, forces opposing the relocation of the Futenma
functions to Nago decided on the 18th to support a single candidate
TOKYO 00002674 006 OF 011
to run for the Nago mayoral election in January next year. Both
issues have the possibility of nullifying the US Forces Japan
realignment plan as a whole, unless the government reaches a
decision at an early date. The government is now pressed to reach a
decision as soon as possible.
Regarding the Nago mayoral election, those opposing accepting the
airfield facilities have announced that they have decided to support
a single candidate, Susumu Inamine. Inamine is a first-time
candidate and former chief of the education board. The election will
likely be a one-on-one contest between Inamine and incumbent Nago
Mayor Yoshikazu Shimabukuro, who is in favor of the existing
relocation plan. There is a strong possibility that the government
will be bound by the election outcome in reaching a decision,
because the election results will make it clear whether the city
accepts the Futenma facilities or not.
9) Commentary on USFJ strategy for Japan contingency: Discussion on
overseas relocation of air force capability necessary
TOKYO SHIMBUN (Page 3) (Full)
November 19, 2009
Shigeru Handa, editorial staff member
A U.S. Forces Japan (USFJ) plan to dispatch additional military
aircraft to Kadena Air Base (KAB) and Futenma Air Station has been
revealed. Some 80 airplanes will be deployed to KAB and around 300
helicopters will be deployed to the Futenma base from the U.S.
mainland.
Even KAB, which has two 3,700-meter runways and which could easily
absorb the Futenma Air Station during peacetime, will be very
crowded. It appears that Foreign Minister Katsuya Okada's proposal
to merge KAB and Futenma as a solution to the Futenma relocation
issue will not be feasible.
However, the number of aircraft at KAB is not constant. The B-52
bomber units withdrew in 1970 at the height of the Vietnam War. The
deployment of the F-15 fighters started in 1979, but 18 of them were
withdrawn in 1992, after the disintegration of the Soviet Union.
Last April, the USFJ made an unofficial proposal to the Ministry of
Defense to withdraw all fighters from the Misawa base in Aomori
Prefecture and to withdraw some aircraft from KAB. While the
proposal has not been considered in detail, this development serves
to show that the present state of the bases is not permanent.
A squadron of the top-of-the-line F-22 stealth fighters, which have
been coming and going at KAB, will be more powerful than two
squadrons of the F-15 fighters based in Kadena.
It seems that with the introduction of unmanned aircraft, the U.S.
Air Force is also considering using the F-22s to fill the gap
created by decommissioned fighters or rotating the deployment of
aircraft between U.S. military bases in Japan and the U.S. mainland.
The Japan-U.S. talks on USFJ realignment, which includes the Futenma
relocation issue, started in February 2005 with both sides agreeing
to a "review of the USFJ troop structure." Discussions between the
two countries on all options, including the relocation of air force
TOKYO 00002674 007 OF 011
capabilities overseas, should not be considered taboo, but should be
a central theme.
10) Foreign Minister Okada says MSDF logistic support operations in
Indian Ocean will not be resumed
AKAHATA (Page 2) (Full)
November 19, 2009
At the House of Representatives Foreign Affairs Committee on Nov.
18, Foreign Minister Katsuya Okada discussed the withdrawal of the
Maritime Self-Defense Force (MSDF) from logistic support operations
in the Indian Ocean when its legal authorization, the new special
antiterrorism measures law, expires in January. He said: "We have
decided not to undertake any further refueling operations,"
revealing that he has no plans to resume the mission. This was in
response to a question from Katsuei Hirasawa (Liberal Democratic
Party).
11) Senior Vice Foreign Minister Fukuyama meets with Afghan
president
NIKKEI (Page 2) (Full)
November 19, 2009
Kabul, Jiji
Senior Vice Foreign Minister Tetsuro Fukuyama held talks on Nov. 18
with Afghan President Hamid Karzai in Kabul. Fukuyama explained to
Karzai about Japan's aid package worth 5 billion dollars over the
next five years to help reconstruct Afghanistan. He called on Karzai
to make efforts to restore public order and improve his governance
capability. Karzai expressed his appreciation for Japan's assistance
and cited such issues as the restoration of public order as
challenges for his second term in office.
12) U.S. strategy for Japan contingency revealed; a possible factor
behind difficulty to merge Futenma base with Kadena Air Base
TOKYO SHIMBUN (Top play) (Full)
November 19, 2009
It was learned that U.S. Forces Japan (USFJ) has a contingency plan
to deal with an armed invasion of Japan by dispatching an additional
80 aircraft to the Kadena Air Base (KAB) in Okinawa (straddling the
towns of Kadena and Chatan and Okinawa City) and an additional 300
helicopters to Marine Corps Air Station Futenma (in Ginowan City).
This explains the military factor behind the U.S. side's renewed
rejection of the proposal to merge Futenma Air Station with the KAB
at the Japan-U.S. cabinet level working group on Futenma
relocation.
According to a source involved with Japan and U.S. military issues,
the U.S. Air Force has drafted a plan to boost combat capability in
the event of a contingency in Japan. An additional 80 aircraft,
including F-16 fighters, airborne warning and control system (AWACS)
planes, air tankers, and transports, would be dispatched from the
U.S. mainland.
Since there are approximately 100 military planes, including 54 F-15
fighters of the 18th Air Wing and the U.S. Navy's P-3C patrol
planes, stationed regularly at the KAB at present, the contingency
TOKYO 00002674 008 OF 011
plan calls for doubling the number of aircraft.
In a contingency, the U.S. Marines will also dispatch an additional
300 large helicopters for the transport of troops to the Futenma
base. This will mean a seven-fold increase from the current 50
helicopters.
With regard to the reason why the scale of increase in aircraft by
the Marines would be larger than that by the Air Force, the same
source said: "The explanation I got is that damaged helicopters and
those with mechanical troubles will not be fixed but rather will be
replaced by other aircraft."
If all the aircraft and helicopters were concentrated in KAB, the
base would be jammed with aircraft. The U.S. side reportedly
explained that: "The minimum speed of fighters and the maximum speed
of helicopters at takeoff and landing are the same at 120 knots
(approximately 220 kilometers per hour), and this will cause
operational problems if they fly together. Therefore, it is
necessary to have two air bases in Okinawa."
The USFJ's contingency strategy is based on a hypothetical armed
attack by the Soviet Union, which had military forces on par with
America's in the Far East during the Cold War. The same level of
military reinforcement is said to be necessary for a contingency in
Taiwan or on the Korean peninsula.
While the probability of such a contingency is extremely low, the
USFJ reportedly premises its use of military bases on a contingency
situation.
13) Foreign Minister Okada: It will be difficult to disclose
investigation results of "secret nuclear deal" before year's end
NIKKEI (Page 2) (Full)
November 19, 2009
At a House of Representatives Foreign Affairs Committee session
yesterday, Foreign Minister Katsuya Okada stated that it will be
difficult to disclose the investigation results of allegations
concerning the secret Japan-U.S. nuclear deal before the end of the
year. He indicated the outlook that the investigation results will
be made public early next year.
14) Okinawa Prefectural Police asks for U.S. military's cooperation
in having staff sergeant appear for questioning over hit-and-run
incident
SANKEI (Page 22) (Full)
November 19, 2009
A 27-year-old staff sergeant based at the U.S. Army Torii
communications station has been refusing to appear for police
questioning on a voluntary basis in connection with the hit-and-run
incident that killed a 66-year-old man of Yomitan Village, Okinawa
Prefecture. The Okinawa Prefectural Police revealed on Nov. 18 that
they have asked the U.S. military for its cooperation in having the
staff sergeant respond to their request for his appearance as a
suspect.
In order to report the criminal charges regarding the incident to
the U.S. military in accordance with the Japan-U.S. Status of Forces
TOKYO 00002674 009 OF 011
Agreement, the prefectural police plan to carry out the
investigation cautiously. Meanwhile, the lawyer representing the
staff sergeant expressed on Nov. 18 an intention to respond to
questioning if the prefectural police report the criminal charges
(to the U.S. military).
15) Lower House Speaker Yokomichi: Coordinating views on Futenma
issue is prime minister's duty
SANKEI (Page 5) (Full)
November 19, 2009
House of Representatives Speaker Takahiro Yokomichi yesterday made
an unprecedented cutting remark toward Prime Minister Yukio Hatoyama
in reference to inconsistent remarks cropping up from among cabinet
ministers responsible for dealing with the relocation of the U.S.
Marine Corps' Futenma Air Station. Delivering a speech in Tokyo,
Yokomichi said: "Coordinating views (among cabinet ministers) is
necessary. That is Mr. Hatoyama's duty."
Yokomichi further said: "Some members of the Democratic Party of
Japan say that the Diet is not a place for the ruling parties to
discuss but a place for discussion between the government and the
opposition parties. Although a parliamentary cabinet system has been
adopted, the Diet is based on the doctrine of separation of powers
of administration, legislation and judicature. It is important for
all political parties to discuss matters thoroughly." This remark
was intended to express his opposition to DPJ Secretary General
Ichiro Ozawa's stock argument that the Diet is a place for the
opposition parties to confront the government and the ruling
parties," although he did not mention Ozawa by name.
16) LDP, New Komeito maintain reasonable distance
MAINICHI (Page 5) (Full)
November 19, 2009
Hirohiko Sakaguchi
The secretaries general, policy chiefs and Diet affairs committee
chairmen of the opposition Liberal Democratic Party (LDP) and New
Komeito met yesterday for the first time since they fell into the
opposition. They discussed how to deal with Diet business. They had
not had much contact with each other for about the past month and a
half, based on the wishes of the New Komeito, which wants to play up
its own political identity. The Democratic Party of Japan (DPJ) is
the largest party in both Diet chambers. Under the current
situation, if the LDP and New Komeito discontinue their relations,
they might both be wiped out. Therefore, the two opposition parties
appear to be maintaining neutral attitudes for the time being by
jointly submitting lawmaker-initiated bills.
In yesterday's meeting, the participants agreed to call on the
government and ruling parties to hold a party heads debate on Nov.
25 and intensive deliberations on foreign and security policy and
the issue of politics and money at the House of Representatives
Budget Committee, and to report at the Diet on the Japan-U.S. summit
meeting and other events.
The LDP and New Komeito have jointly submitted a bill to support
people infected with hepatitis to the current Diet session. The two
parties are now working on another bill to settle a class action
TOKYO 00002674 010 OF 011
lawsuit on the recognition of atomic-bomb disease. They are expected
to jointly submit a total of five bills during the ongoing Diet
session. However, the New Komeito did not agree to submit a bill on
cargo inspection of ships heading to and from North Korea or a bill
to extend the Maritime Self-Defense Force's refueling mission in the
Indian Ocean. On the other hand, the LDP did not join the New
Komeito's plan to submit a bill revising the Political Funds Control
Law. Gaps between the two parties appear to be growing.
17) Financial Affairs Minister Kamei: We will maintain present
ruling coalition framework
YOMIURI (Page 4) (Full)
November 19, 2009
With regard to his plan to form a new party with the New Party
Nippon and the group led by former trade minister Takeo Hiranuma, an
independent, People's New Party leader Shizuka Kamei, who is now
serving as state minister for financial services, said yesterday at
a press conference: "(Even if the new party plan is realized) my
party will not withdraw from the coalition government. That's
obvious," indicating his intention to maintain the present coalition
framework.
18) Two U.S. carriers in tug-of-war over tie-up with JAL: Delta
announces 92 billion yen in capital assistance with eye on open
skies agreement
NIKKEI (Page 9) (Excerpts)
November 19, 2009
Delta Air Lines, the biggest U.S. carrier, on Nov. 18 announced that
it had floated a proposal to Japan Airlines, now under
restructuring, for offering capital assistance totaling roughly 1
billion dollars, or 92 billion yen, and joining an alliance it
leads. Teaming up with an investment fund, American Airlines, the
second largest U.S. carrier that forms another alliance, has also
proposed to JAL to offer up to 130 billion yen. The governments of
Japan and the U.S. will likely sign an open skies agreement shortly.
The two U.S. carriers aim to expand operations in the Asian market,
by bringing JAL into the fold. JAL plans to decide its capital
tie-up partner as early as this year. The tug-of-war between the two
U.S. carriers will likely heat up.
Business expansion in Asia aimed at
Delta President Edward Bastian on the 18th held a press conference
in Tokyo and released his company's plan to offer capital assistance
to JAL. According to Bastian, the company has floated a proposal to
JAL that it is ready to offer capital assistance totaling 1.2
billion, of which 500 million dollars would likely be dispensed by
purchasing shares by the third party allocation capital increase.
Delta is also offering 20 million dollars to cover expenses for JAL
to join the SkyTeam alliance, by defecting from the Oneworld global
airline alliance and 300 million dollars for offsetting a short-term
decline in JAL's sales, as well as 200 million dollars for losses
associated with the sale of aging planes.
American Airlines on the same day issued a statement noting that
since switching alliances amid financial restructuring involves
taking risks, the best option for JAL would be continuing business
TOKYO 00002674 011 OF 011
under the present state (as a member of the Oneworld alliance)." The
carrier has offered up to 130 billion yen in assistance, teaming up
with TPJ, a leading U.S. investment fund.
There is a regulation that limits the ratio of ownership of carriers
by foreign air carriers to one-third. However, JAL is likely to
conduct an additional capital increase of about 300 billion yen in
the process of restructuring, so both carriers are not likely to run
into any issues.
JAL is now applying to the government-backed Enterprise Turnaround
Initiative Corp. of Japan for capital assistance for restructuring.
JAL President Haruka Nishimatsu has stated that it would be natural
for the company to maintain a partnership with American Airlines.
Even so, Delta is competing with American for capital assistance to
JAL, because Japan and the U.S. will likely sign an open skies
agreement as early as early December.
ROOS