US proposes Japan antitrust immunity

7th Oct 2010
US proposes Japan antitrust immunity

The United States department of transportation has mooted antitrust immunity for two aviation alliances offering services to Japan.

Immunity, which remains subject to the signing of an Open Skies agreement between the two countries, would allow Oneworld alliance members American Airlines and Japan Airlines (JAL) to more closely coordinate operations in trans-Pacific markets.

Separately Star Alliance members United Airlines, Continental Airlines and All Nippon Airways would also benefit from the deal.

Open Skies

The proposals will require the support of the Japanese Ministry of Land, Infrastructure, Transport and Tourism.

Once assured, Washington officials will move to finalise an existing Open Skies pact drawn up in December 2009 to liberalise commercial aviation between the United States and Japan.

“We appreciate that the DOT recognises the value in our application,” said Tsutomu Ando, executive officer of international affairs at Japan Airlines.

“These new opportunities afforded by developments in the aviation landscape in Japan will allow us to optimize flight schedules, pricing, and enhance operational efficiency to ultimately benefit the customers.”

JAL is presently undergoing a state-backed restructuring after declaring bankruptcy earlier this year. In August the airline announced details of a rehabilitation plan that will see thousands of job cuts as well as route closures and a debt waiver.

“An immunised joint business will benefit the US and Japanese economies, promote increased cultural exchange and provide more travel choices and greater access to discounted fares for millions of consumers,” said Will Ris, American Airline’s senior vice president for government affairs.

BA-Iberia-American Airlines

The news comes on the same day British Airways, American Airlines and Iberia launched their long-awaited transatlantic tie-up.

Approval for the deal was granted after 14 years of negotiations, with the airlines now offering the same ticket price across 5,178 daily departures, accounting for more than $7bn (£4.4bn) of annual revenues.

Dismissed as a “monster monopoly” by Virgin Atlantic founder Sir Richard Branson, the revenue-sharing deal will give passengers access to a joint network serving 433 destinations in 105 countries.

Willie Walsh, BA chief executive, said “I think you are going to witness a new era of competition on the Atlantic” as he claimed the trio – the cornerstone of the Oneworld airline alliance – could now compete on a “level playing field” with the SkyTeam and Star alliances.


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