Monday, February 8, 2010

No Alliance Switch for JAL

Reports of the demise of the JAL/oneworld Alliance appear greatly exaggerated. The beleaguered and bankrupt Japanese carrier announced today that it will remain part of oneworld and closed its negotiations with Delta Air Lines to jump to SkyTeam. See JAL to Stay With Oneworld, End Delta Talks, Reuters, Feb. 7, 2010 (available here). According to the report, “the burden of upgrading computer systems and other costs” along with the risk that JAL and Delta would not be able to receive regulatory approval for antitrust immunity” influenced the decision.

This is no small victory for oneworld. The alliance partners are still awaiting approval from regulators on both sides of the Atlantic in order to join rivals SkyTeam and Star in being able to deepen their cooperative relationship. Both the European Commission and the U.S. Department of Justice have raised concerns that oneworld would harm transatlantic aviation competition and bar new entrants at heavily trafficked airports such as London Heathrow. Assuming oneworld is able to clear the regulatory hurdles for its transatlantic link-up, its attentions will certainly turn to applying for antitrust immunity for its transpacific services with JAL. Star Alliance members United Airlines and Continental currently have an application pending before the Department of Transportation to cooperate on rates, routes, and services with Japan’s other major airline, ANA.

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