American Air in JAL tie-up, investment talks: report

Airport ground staff work while aircraft of Japan's largest airline Japan Airlines Corp (JAL) sit parked at Haneda airport in Tokyo January 17, 2009.

LOS ANGELES (Reuters) - The parent company of American Airlines AMR.N is in talks to set up a broad venture with Japan Airlines Corp 9205.T in a deal that could see the U.S. carrier investing hundreds of millions of dollars in JAL, The Wall Street Journal cited sources as saying on Saturday.

AMR Corp has been in intensive negotiations for over a month to form a "far-reaching" joint venture with the Asian carrier and is willing to invest to secure an agreement, the Journal cited people familiar with the discussions as saying.

Any investment deal would give loss-making JAL, which posted 99 billion yen ($1.1 billion) of net losses in the April-June quarter, a much-needed capital infusion.

JAL is in talks with several carriers about a cash infusion, according to separate media reports.

Sources have told Reuters that Delta Air Lines (DAL.N), the world's largest carrier, is engaged in closed-door discussions to take a minority stake in the Asian carrier, to expand its global footprint.

On Saturday, Japan's national broadcaster, NHK, reported that JAL was also seeking a capital injection of several billion yen from Air France-KLM (AIRF.PA).

The Nikkei business daily reported on Saturday that Delta had proposed in late August a capital injection of 30 billion to 50 billion yen into JAL. But it cited an unnamed senior official at JAL as saying a tie-up with Delta would be difficult because the Japanese carrier has a partnership with American through the Oneworld alliance.

Delta and Air France-KLM are in the rival SkyTeam alliance.

JAL is headed for its second-straight annual loss this business year to March, hit by a downturn in travel and as it struggles to rein in costs.

It secured a 100 billion yen government-backed loan in June and is expected to ask for more financial assistance to help it restructure.

JAL is due to submit a restructuring plan by the end of the month.

(Reporting by Edwin Chan; Editing by Peter Cooney)