Wednesday, January 13, 2010

BA Sweetens the Deal for JAL

British Airways may not be keen on surrendering slots to its competitors in order to win antitrust immunity from the Department of Transportation for its partnership with American Airlines, see Joint Applicants' Answer to the Department of Justice's Motion for Leave and Comments, at 8, Dkt. No. DOT-OST-0252 (Jan. 11, 2010) (available here), but it is are open to transferring some to JAL to keep the Japanese carrier in the oneworld alliance.  See Kaveri Nithyananthan, British Air Offers JAL Heathrow Slots in Oneworld Deal, Dow Jones Newswire, Jan. 12, 2010.  From the story:

British Airways PLC . . . said Tuesday it would provide Japan Airlines Co. Ltd. coveted slots at London's congested Heathrow airport as part of its offer to keep JAL in the Oneworld alliance.

The U.K. carrier has offered ailing JAL a deal with an incremental value of between $165 million and $240 million over three years to encourage the Tokyo-based airline to stay with the alliance.

A British Air spokesman said the deal includes establishing a joint business for flights between Japan and Europe, which would increase revenue-sharing opportunities and double the number of JAL codeshares on BA's European flights.

"We would aim for the joint business to come into effect from April 2011, subject to regulatory approval," BA's spokesman added.

Finding regulatory approval may be easier said than done for the oneworld Alliance.  It's possible that the alliance is getting ahead of itself, envisioning a transpacific link-up before its transatlantic proposal gets off the ground.  The DOT has yet to rule on its current application which was originally set to end last October and it's unclear what attitude the agency will take toward the U.S./Asia aviation market.  The pending application filed last month by U.S. carriers United Airlines and Continental with Japan's ANA will provide a new test for the DOT's willingness to continue dispensing broad grants of antitrust immunity despite heavy criticism from the Department of Justice's antitrust division.  The oneworld Alliance's best laid plans to keep JAL in its fold may be for naught.

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