AA want to reevaluate the USD100 million guarantee to JAL? :o

Discussion in 'JAL | Mileage Bank' started by JALPak, Apr 20, 2011.  |  Print Topic

  1. JALPak
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    JALPak Gold Member

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    Sounds like AA wants to pay less than what they have promised JAL for. They promised JAL 100M revenue increase per year for the first three years but due to the earthquake they want to reevaluate that deal!? :eek:

    http://aviationblog.dallasnews.com/archives/2011/04/remember-american-airlines-100.html

    From AA's 10-Q wording:

     
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  2. Kaanapali
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    Kaanapali Gold Member

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    From the language in the 10-Q, this does not require 100 million per year....instead that figure is defined as a cap.....not a minimum per year.

    I bet the re-evaluation is tied into the phrase "a guarantee of certain minimum incremental revenue resulting from the successful operation of the joint business". I take it JAL's operation has been somewhat adversely affected by the earthquake/tsunami ...but I have no idea if this is a real number or something merely transitory thereby allowing AA the option to do this re-evaluation....
     
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  3. JALPak
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    JALPak Gold Member

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    It seems unfair if AA has to pay 100M to JAL but also unfair to JAL if they don't get the money. Maybe deferring the payment (and adjusted based on inflation) is a fairer solution?
     
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  4. JALPak
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    JALPak Gold Member

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    http://www.oneworld.com/ow/news/details?objectID=20395

    The original offer stated in the PR doesn't say successful operation. And to make it worse, it says incremental revenue guarantees...so does it mean if the revenue drops by 200M this year, AA needs to pay the profit generated from the 300M revenue to JAL? (And the cap for that is 100M?)
     
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  5. Kaanapali
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    Kaanapali Gold Member

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    I agree that this language (PR quoted above) is totally different than that quoted in the 10-Q......though one could argue the 10-Q refers to amounts that AA has to pay......and the PR says revenue guarantees (which said revenues could come from AA's operations with JAL changing .....from co-shares ticket prices to operational costs etc....)
     
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  6. JALPak
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    JALPak Gold Member

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    Yup that's sounds like the case with the amount being capped at USD100M.

    I wonder how much loss AA has to share from this JBV now :p It started just in time to miss the initial escape rush (profit) and now needs to bear the costs of loss from routes covered under JBV :eek: They couldn't have picked a worse timing IMHO
     
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