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Japan Airlines sticks with oneworld. To apply for antitrust immunity with American Airlines

9-Feb-2010 7:43 PM

Japan Airlines (JAL) announced (09-Feb-2010) its decision to strengthen its partnership with American Airlines. The carriers, both members of the oneworld alliance, will jointly apply to the US Department of Transportation (DOT) and the Japan Ministry of Land Infrastructure, Transport and Tourism (MLIT) for antitrust immunity (ATI) approval on transpacific routes. JAL and AA intend to enter a joint business venture, subject to government approval, which will "enhance their scope of cooperation on the routes between the United States and Japan, through adjustments to their respective networks, flight schedules, and other business activities, allowing both carriers to better complement each other to develop and offer competitive products and quality service to their customers". [more - Japan Airlines][more - American Airlines][more - Delta Air Lines][more - oneworld][more - Perspective I][more - Perspective II]

The decision, which JAL stated was analysed in “great detail” was reportedly made due to the two carriers’ ten-year history of cooperation and JAL's concerns about winning regulatory approval for a tie-up with Delta on transpacific services (Bloomberg/Dow Jones/Associated Press/The Yomiuri Shimbun/Kyodo, 09-Feb-2010). American and private-equity firm TPG offered to invest as much as USD1.4 billion in JAL to safeguard its relationship, while Delta and the SkyTeam alliance presented an “aggressive” bid, offering JAL a USD1 billion package including financing in a bid to lure the carrier from American/oneworld. Despite its financial troubles, JAL remains Asia's largest carrier by revenue, offering entry into the world's second-largest economy and an extensive route network through other parts of Asia.

Japan Airlines:We have analysed this issue in great detail, and we are excited at the prospects in terms of the convenience and benefits for our customers. We also firmly believe that the advantages of this development with American Airlines can strongly support JAL at a time when we are striving towards the revival of our business, which we are determined to achieve. We certainly look forward to a deeper, more mutually-beneficial relationship with our long-time partner. As JAL undergoes the process of reorganization, it will seize the opportunity presented by this partnership to strengthen its network and further improve its offerings. From hence forth, in addition to the joint business agreement with AA, JAL will also fortify its relationships with other partners in the oneworld alliance, so as to provide customers a comprehensive range of products and services, and become once again, the airline of customer’s choice", Masaru Onishi, Group Chief Operating Officer and President. Source: JAL, 09-Feb-2010.

American Airlines: "We respect that this was an important decision for Japan Airlines and the government of Japan, and we believe they have made the right choice for JAL's many stakeholders, for Japan's national interests and for consumers traveling between Japan and the United States. When oneworld executives and I recently met with JAL Chairman Dr. Kazuo Inamori and President Masaru Onishi and their team, we reiterated our commitment to support JAL on its path to success. We stand firmly by that commitment, and look forward to working closely with JAL to support its restructuring efforts", Gerard Arpey, Chairman and CEO. Source: American Airlines, 09-Feb-2010.

oneworld: "We respect this was an important decision for Japan Airlines and the government of Japan, and we believe they have made the right choice for JAL's many stakeholders, for Japan's national interests and for consumers. American and its oneworld partners look forward to working with JAL to create an even stronger partnership through commercial enhancements and assistance that can generate important new revenue to JAL and support its successful restructuring," Gerard Arpey, Governing Board Chairman and American Airlines Chairman and CEO. Source: Company Statement, 09-Feb-2010.

oneworld: "Japan Airlines is a highly valued member of oneworld and all its member airlines so we very much welcome today's confirmation of the airline's continued membership of our alliance. We now look forward to working with JAL, under its new management team....to implement the proposals we have presented to deepen our co-operation, delivering the best alliance potential to the airline, its customers and employees, the government and taxpayers of Japan and the travelling public at large," John McCulloch, Managing Partner.Source: Company Statement, 09-Feb-2010.

British Airways: "During JAL's alliance review, British Airways and its oneworld partners have demonstrated our extraordinary commitment to JAL. Today's decision brings stability and certainty to JAL at a time when it is most needed, providing the greatest long-term value at the lowest risk. We are delighted that we can now progress with our colleagues at JAL in strengthening our ties and co-operation still further and help re-establish JAL firmly as Asia-Pacific's and one of the world's leading airlines," Willie Walsh, CEO. Source: Company Statement, 09-Feb-2010.

Cathay Pacific: "This is great news for oneworld, Japan Airlines and Cathay Pacific. We are very pleased we can all move ahead in building oneworld as the pre-eminent and highest quality alliance for Asia and the world, for the benefit of our customers and all our other stakeholders," Tony Tyler, CEO. Source: Company Statement, 09-Feb-2010.

Qantas: "As a long-standing partner of JAL's, Qantas is pleased that it has decided to remain within oneworld. We believe oneworld is clearly the right strategic alliance option for JAL, providing both commercial stability and growth opportunities at a vital time for the airline. Qantas looks forward to working with the new JAL leadership team, together with our oneworld partners, as it lays the foundations for long-term viability and success," Alan Joyce, CEO. Source: Company Statement, 09-Feb-2010.