The proposed merger would couple Japan's two largest cargo airlines.
'Following the collapse of the economy in the United States last autumn, the financial crisis that spread worldwide caused demand for air cargo transport to fall drastically and market situations to worsen,' NYK said in a statement. 'In view of this, as a precondition for continued growth and development into the future, both companies are focusing on improving profitability in the present situation. Through a major restructuring of the cargo business and by combining the strengths of the two largest cargo operators in Japan to form the biggest solitary Japanese cargo transport provider, JAL and NCA foresee being able to secure profitability and raise the value of both companies.'
JAL Cargo and NCA started code-sharing on flights for the first time in March this year. NYK said that expanded both airlines' networks and increased quality by combining the strengths of the two airlines.
NYK said a merger of the operations would 'improve the competitiveness of Japan's air cargo transport provider in the international arena which in turn, is anticipated to greatly support various industries in Japan.'
The two sides signed an agreement Friday to discuss the merger, with an aim to start operating jointly by April 1, 2010. The airlines said they now 'begin consulting with the relevant authorities and parties concerned to explore in greater depth, the feasibility and benefits of this reform and potential merger.'
Reports out of Japan on Friday morning hinted at the deal, and suggested NYK and JAL would each take a 45 percent stake in the merged cargo business, with outside NCA shareholders taking up the rest of the shareholdings. JAL estimates the restructuring could save more than $200 million.
