UPDATE 3-JAL to shelve talks with Delta, American -Kyodo

* JAL to focus first on restructuring plan -Kyodo

* Could eventually resume talks with Delta, American-Kyodo
(Adds analyst comment, share prices)

TOKYO, Oct 5 (Reuters) - Japan Airlines Corp (JAL) 9205.T
plans to put on hold tie-up talks it has been holding
separately with Delta Air Lines (DAL.N) and AMR Corp's AMR.N
American Airlines, Japan's Kyodo news agency reported on
Monday.

Delta and a rival group led by American Airlines have been
in talks to invest in JAL and form closer ties, eyeing
expansion in Japan and the rest of Asia. JAL is Asia's largest
airline in terms of annual revenue. [ID:nT114674]

However, Kyodo said JAL has decided to focus first on
putting together a restructuring plan with the government task
force that is overseeing the airline's revival after the
government backed a 100 billion yen ($1.11 billion) loan.

JAL, weighed down by $15 billion in debt and headed for its
second straight annual loss, could resume talks with American
and Delta after it has put its restructuring on a solid track,
Kyodo said.

JAL spokeswoman Sze Hunn Yap said she could not verify the
report and declined to comment further. American and Delta each
declined to comment.

"I'd be surprised if there was any kind of action this
year, actually," said airline consultant Robert Mann of R.W.
Mann & Company.

"It removes the immediate issue of American's potentially
losing JAL (from the Oneworld Alliance)," Mann said. "But it
doesn't resolve the problem one way or the other."

The restructuring of JAL took a new turn in late August
when the Democratic Party came to power in a landslide election
victory, ending the rule of the Liberal Democratic Party, which
had supported state help for the airline.

The Democrats have said JAL's restructuring plan, which
includes cutting 6,800 jobs and eliminating 50 routes, did not
go far enough and it assigned a task force to push through more
drastic cost cuts.

JAL is seeking 250 billion yen in funding to carry it
through the end of the financial year in March 2010 and it is
widely expected that the state will have to give it a capital
infusion to keep it afloat. [ID:nT63351]

Both Delta and American have been courting JAL with the
promise of an equity investment so they can gain access to
promising routes in Asia, including those in Japan, where
Tokyo's Haneda airport is undergoing a major expansion.

American teamed up with British Airways BAY.L and Qantas
Airways (QAN.AX) to keep JAL in the Oneworld Alliance grouping
of airlines, sources told Reuters last month. They said that
executives from all three carriers met with JAL in September.

Delta has been wooing JAL to join the rival SkyTeam
alliance, sources have told Reuters. The media has reported
that fellow SkyTeam member Air France-KLM (AIRF.PA) was a
potential partner with Delta for an investment in JAL.

Delta has offered to invest about 30 billion yen ($334
million) in JAL, Kyodo said. ($1=89.88 Yen)

Shares of Delta were up 1.32 percent at $8.43 on the New
York Stock Exchange. AMR shares were up 1.07 percent at $7.54
on the NYSE. JAL shares were down 1.46 percent.
(Reporting by Taiga Uranaka and Nathan Layne, with additional
reporting by Kyle Peterson in Chicago; editing by Hugh Lawson,
Karen Foster and Matthew Lewis)