2-Nov-2009 2:57 PM

US-Japan bilateral talks make "enormous progress"

US Department of State stated the US expects to reach a bilateral open skies agreement with Japan by Dec-2009, amid signs of “enormous progress” in talks, with an aim of gaining US regulatory approval for the venture by Oct-2010. Expressing cautious optimism that a substantial liberalisation might be possible, US negotiators are trying to move progress along quickly on the back of the restructuring of embattled JAL.

For years Japan's aviation industry has been awaiting the "big bang" when capacity at Tokyo's Haneda (domestic, soon to add international access) and Narita Airports is to be significantly increased. JAL and ANA had been positioning to ensure that the newly available slots which were to be added would stay in Japanese airline hands. However, substantial cutbacks - now almost inevitable for JAL, means that the carrier's hold on new airport capacity becomes more tenuous.

This is causing a headache for both parties. The US side has reportedly agreed to a reduction in its currently high proportion of Narita slots after the expansion, partly as a gesture of goodwill, in the context of the major US airlines, Delta and American, seeking to buy into  JAL - with resulting relationships requiring anti-trust immunisation. This makes for delicately balanced negotiations, with several issues criss-crossing.

US Government: “We made enormous progress this week on the text of the open skies memorandum of understanding. Only a few issues remain to be resolved,” John Byerly, Deputy Assistant Secretary for Transportation Affairs. Source: Kyodo News, 31-Oct-2009.

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