TOKYO - Japan Airlines Corp (9205.T: Quote, Profile, Research) said on Friday it would sell nearly half of its credit card unit to Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research) in a deal that will give the airline a windfall gain of about $400 million.
Buffeted by stiff competition and higher fuel prices, JAL had been looking to sell a stake in the unit, JALcard, to pay down debt and finance an upgrade of its ageing fleet.
The sale will allow Mitsubishi UFJ, Japan's largest bank, to expand its presence in consumer lending, and gain access to the card's relatively affluent users.
JAL said in a statement that it would sell a 49 percent stake in the card unit to Mitsubishi UFJ and likely book a one-time gain of 42 billion yen ($400 million) in 2008/09.
JALcard ranks sixth in Japan's credit card industry.
Separately, the airline said on Friday its 2007/08 profit likely exceeded its earlier projection by 88 percent due to strong business travel demand on its international routes. Shares in JAL closed up 3.6 percent at 257 yen after the Nikkei business daily reported on the earnings revision. The Nikkei average .N225 rose 2.1 percent.
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