A Japan Airlines-ANA Merger and Star Alliance Leaving Japan (and Korea)?

Could Star Alliance be leaving both South Korea and Japan? Such a question is unfathomable as recently as two weeks ago. But now, in the age of COVID-19 and ongoing travel restrictions decimating the airline industry, this scenario may just has a faint chance at becoming reality.

According to a Bloomberg news article, Heizo Takenaka, an adviser to Japanese prime minister Yoshihide Suga, believes Japan should bail out and merge ANA Holdings Inc. and Japan Airlines Co (JAL):

Japan’s government needs to prepare to inject capital into the country’s struggling airlines and demand that they restructure to survive the slump in business, an influential government adviser said.

Heizo Takenaka, an economist who served as a minister and is an adviser on Prime Minister Yoshihide Suga’s Growth Strategy Council, said in an interview that ANA Holdings Inc. and Japan Airlines Co. will eventually need more support and that they should “become one.”

A link to the Bloomberg article is here. But it is behind a Paywall. Here is a screenshot courtesy of  Twitter user @JournoDannyAero:

Source of tweet:

What does this mean?

While this suggestion is of course not official, and does not appear to carry any weight, one can’t help but wonder what would happen if the airlines were to merge, specifically which carrier (and alliance) will survive in such event. Will it be Japan Airlines (JA) and OneWorld, or All Nippon Airways (NH) and Star Alliance?

Together, ANA and Japan Airlines dominate the domestic Japanese market.

It is also interesting to note a similar event is currently being played out in Korea, where Korean Air (KE) is set to become the majority owner of Asiana (OZ), which if approved, will eventually see Asiana’s brand retired. In the Korean scenario, SkyTeam alliance will survive and become the sole airline alliance with a footprint in South Korea. In the unlikely event that JAL and ANA merge, and if ANA is the brand that will be phased out, we could be seeing Star Alliance leaving both South Korea and Japan, and that will be quite a blow to all Star Alliance travelers (such as United Airlines’ Elites).