Monday, September 21, 2009

JAL and the Future of oneworld

British Airways is reported to be in talks with Japan Airlines (JAL) to ensure it stays in the oneworld alliance,  As discussed on the blog last week, see here, JAL is seeking over $2 billion in funding to offset the severe losses it's suffered over the last several years.  News agencies began to immediately report that Delta Air Lines, a member of the rival SkyTeam Alliance, was eager to strike a deal with the Japanese airline.  Shortly thereafter, American Airlines became involved in intense negotiations with talks of take a substantial stake in the carrier.  Given the importance of JAL to oneworld's network access into Japan and Asia, both BA and AA will likely remain vigorous in their attempts to broker a deal.

If a deal with JAL falls through and the carrier defects to SkyTeam, it may not be the worst news oneworld hears in 2009.  The alliance's pending antitrust immunity application before the U.S. Department of Transportation is expected to be decided in October.  With the Justice Department remaining critical in its stance toward these international ventures, both BA and AA should expect the same (if not more) intense scrutiny from Justice's Antitrust Division that Continental Airlines received in its bid to join the Star Alliance.  While the DOT eventually decided to step aside most of the Justice Department's concerns when issuing its final order for Star, there is no guarantee it will be so sanguine about the BA/AA link-up.  Much attention has been placed in recent months on the dominant position both carriers will have in the transatlantic market between the U.S. and London Heathrow should they be granted full antitrust immunity to cooperate on scheduling, routes, and prices.  That fact may stay the DOT's hand when it goes to wield its wand of antitrust immunity in October.

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