American Airlines and Japan Airlines, both members of the oneworld alliance, welcomed (06-Oct-2010) an order issued by the US Department of Transportation (DoT) tentatively approving their antitrust immunity application filed in Feb-2010. By this action, the DoT has moved a step closer to granting antitrust immunity to the airlines, as allowed under a provision of the Open Skies agreement initialed by the US and Japan in Dec-2010. Open Skies allows new services between the US and Tokyo Haneda. American will launch New York JFK-Tokyo Haneda service on 20-Jan-2011, while Japan Airlines will commence Tokyo Haneda-San Francisco and Tokyo Haneda-Honolulu service from 31-Oct-2010. Under an immunised agreement, the airlines will cooperate commercially on flights between North America and Asia while continuing to operate as separate legal entities. Obtaining antitrust immunity for their proposed trans-Pacific joint business will allow American Airlines and Japan Airlines to better compete with the two other global alliances that serve the US–Asia market. The DoT also granted tentative antitrust immunity for United Airlines, Continental Airlines and All Nippon Airways, all members of the Star Alliance having consolidated the two requests into a single proceeding in Mar-2010. The US DoT found that the carriers’ cooperation in two separate alliances would improve competition, lower fares and increase schedule options, according to an agency statement. [more]
US tentatively grants antitrust immunity to American Airlines and JAL
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Korean Air brings Delta a wider network in Asia than ANA or JAL offer to their respective JV partners, United and American. A Korean Air-Delta JV could result in more destinations and flights being added once they are able to sell jointly.
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Singapore Airlines feels the need for a significant North American presence to diversify its network and offset pressure from Gulf airlines, which have profoundly weakened SIA in its core Asia-Europe and Australia-Europe markets. Although Singapore Airlines plans to resume nonstop North American flights, these are token services for strategic purposes.
The primary objective has to be securing more fifth freedom rights for one-stop service. Singapore is encouraging the ASEAN bloc to secure open skies with Japan, Korea and the EU since open skies will entail unlimited fifth freedom rights. Korea is unlikely to agree, with Japan hesitant. Fifth freedom liberalisation is a contentious item in the otherwise benign EU-ASEAN negotiations. Countries worry that granting unlimited fifths opens Pandora's box to growth – not just from SIA, but any number of airlines that are quiescent today but could aspire to be powerhouses in the future.