American Airlines and Japan Airlines Corp commenced a trans-Pacific alliance on 01-Apr-2011 enabling them to coordinate schedules and set fares and market promotions jointly (Wall Street Journal, 01-Apr-2011). Despite short-term challenges in the Japan market, the carriers are committed to the partnership "for the long term", said Tsutomu Ando, JAL's executive officer for international alliance.
American and Japan Airlines commence trans-Pacific alliance
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US DOT rejects Qantas-American Airlines joint venture under pressure of unchecked consolidation
After complaints about airlines amassing power through joint ventures to the detriment of consumers, the US DOT appears to be exerting greater and more conservative scrutiny on partnerships. DOT has rejected a proposed JV between American Airlines and Qantas. After DOT declined their request for a much longer response time American and Qantas withdrew their application, submitted in Jun-2015.
At a top level the JV does seem to raise concern: combined, Qantas and American would hold 59% of the US-Australia market. Yet almost all of that – 53% – is from Qantas; American adds only 6ppt.
DOT rejects the notion that such larger market share can possibly be in the interest of consumers. Yet it appears to overlook the benefit American might bring in exchange for incremental market share gains. Nor is it clear if this combination is more anti-competitive than some JVs where two airlines, each with a small- or medium-sized position, combine and become multiples larger. Qantas' 53% market share was earned through quality and smart loyalty programme development while competitors lagged.
Qantas will continue growth in North America, its most successful international market, but American Airlines' growth is uncertain and it may re-evaluate a supposedly planned Los Angeles-Melbourne 787 service.
HK Express receives first A321 and awaits A320neo as Hong Kong's LCC rate grows to 10 percent
HK Express continues to work towards its goal of ending 2018 with 50 aircraft. HK Express will end 2016 with 18 aircraft, including its first A321s and A320neo. The A321s provide additional capacity per movement – important to bring costs down, but also to grow where traffic and slots (at Hong Kong and abroad) do not permit.
Asian LCCs are increasingly gravitating to larger aircraft to try to overcome insufficient infrastructure. Larger narrowbodies at LCCs gained wide awareness with AirAsia's A321 order, although many other LCCs will operate larger types before AirAsia receives its first A321. The A320neo brings additional range, besides the usual efficiency improvements.
HK Express plans to end 2017 with 32 aircraft. Even if sustainable markets can be found, this is rapid growth for an opaque slot system at Hong Kong International Airport. HK Express' continued growth will further boost the share of seats that LCCs operate at Hong Kong. LCCs account for 10% of capacity at Hong Kong in 2016 – up from 5% in 2012. The gains have mostly been earned due to HK Express. With as much success as HK Express claims, it might now be time for the LCC to open its books and present transparent financial reports.