Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Credit Saison Co. may submit bids for Japan Airlines Corp.'s credit card unit, five people with knowledge of the transaction said.
JAL, Asia's most indebted carrier, asked local and overseas firms this week to submit acquisition proposals by Oct. 31, the sources said, declining to be identified as the information is not yet public. Credit Saison plans to ally with Mizuho Financial Group Inc. to buy a stake in JALCard Inc., which has 2 million cardholders.
JAL President Haruka Nishimatsu is selling businesses not related to aviation to cut the carrier's debt by 12 percent this fiscal year. The cardholders spend an average of ¥860,000 a year, making them attractive to the Japanese banks, which face increasing competition from Citigroup Inc. and HSBC Holdings PLC.
"JALCard has high-income customers," said Osuke Itazaki, an analyst in Tokyo at Credit Suisse Group. "A sale of the unit would give Japan Airlines funds to either pay down debt or buy new planes."
The airline has appointed Mizuho Securities Co. as the financial adviser, the sources said. JAL hasn't decided on whether to sell the entire unit and has asked potential bidders for proposals on the size of the stake and possible future cooperation, they said.
JAL spokesman Stephen Pearlman declined comment on bidding for the unit. Mizuho spokeswoman Masako Shiono, Mitsubishi UFJ's spokesman Takashi Miwa, Credit Saison's spokesman Akira Miyashita and Sumitomo Mitsui spokesman Tetsu Morishima also wouldn't comment.
The airline posted a loss of ¥4.3 billion for the three months that ended June 30. It forecasts its first profit in three years this business year as it reduces staff and operating costs.