JAL Task Force Puts Alliance Review On Hold -Source

Japan Airlines Corp. (JALSY) will not revise its alliance strategy until a government task force has finished its review of the loss-making carrier's financial structure, a person familiar with the situation said Monday.

The airlines's executives had hoped to choose between proposals floated by current partner American Airlines and Delta Air Lines Inc. (DAL) this month.

However, the outgoing Japanese government last month appointed a five-member task force to oversee the carrier's future after making its third request for state aid to ride out operating losses and a large debt and pension burden.

The U.S. carriers have maintained contact with the Japanese counterparts, but any resolution of a process that could see JAL switch its allegiance within global industry alliances has been put on hold.

Japan's Kyodo news agency reported earlier Monday that the separate talks between JAL, Delta and American, a unit of AMR Corp. (AMR), had been put on hold.

"No-one is packing their bags," said one person familiar with talks held by JAL, which already has an alliance with American. Both are members of the global Oneworld alliance.

Delta, a member of the rival SkyTeam grouping, has also been courting JAL. While Delta has a large Asian network, SkyTeam lacks a Japanese partner.

-By Doug Cameron, Dow Jones Newswires; 312-750-4135; [e-mail]