Asian routes are the prize in Delta-American fight over JAL

ATLANTA — Japan Airlines isn't the real prize in the fight between Delta Air Lines and American Airlines over who gets to partner with the troubled carrier.

The U.S. carriers are after JAL's Asian routes and the premium passengers that come with them.

The winner gets a bigger revenue stream, more power to help shape overseas customer options and ticket prices and the potential to one day fly its own aircraft and passengers on JAL's routes.

That's why Delta and American will charge ahead in their pursuit of JAL despite its Tuesday bankruptcy filing, plans to shrink service and the tarnished image that has sent travelers to other carriers.

Growth in Asia won't cure everything that ails the major U.S. airlines but it would provide a much-needed boost. Airlines can get higher fares for seats to Asia because international business travelers tend to spend more than leisure fliers. Business travelers fly more and often at the last minute, which means paying higher walk-up fares.

Travel from North America to the Mid-Pacific region, which includes Japan and South Korea, represented 5.8 percent of total premium international air traffic in November, but 12 percent of all the premium revenue, according to the latest International Air Transport Association data.

Overall passenger volume between North America and the Asia/Pacific region is expected to rise 3.8 percent in 2010 and 5.6 percent in 2011, according to a survey of airlines conducted by IATA. Between Europe and the Asia/Pacific region, it is expected to rise 4.4 percent in 2010 and 6.1 percent in 2011.

"It's really where the money is these days," Charles River Associates aviation consultant Mark Kiefer said of Asia.

American and its oneworld alliance partners, including Japan Airlines, currently have about 35 percent of U.S.-Japan market share. That would drop to 6 percent if JAL leaves oneworld and dilute American's revenue from the region. American, which transfers roughly 400,000 passengers annually to Japan Airlines at Narita Airport outside Tokyo, does not break out total revenue for Japan. But a spokesman says the Pacific region, which includes Japan, China and Australia, accounted for roughly 3.5 percent of its total passenger revenue for the 12 months through September. The figure excludes the impact of cargo and other non-passenger revenue. American reports its fourth-quarter and full-year 2009 results on Wednesday.