Two Alliances To Operate Under "Open Skies"
Agreement
The U.S. DOT Wednesday proposed to grant antitrust immunity to
two air carrier alliances for services between the United States
and Japan, subject to the Open-Skies aviation agreement between the
two countries being signed.
The Department’s tentative decision would grant immunity
to “oneworld” alliance members American Airlines and
Japan Airlines, and separately to “Star Alliance”
members United Airlines, Continental Airlines and All Nippon
Airways. If the decision is made final, the members of each
alliance would be able to more closely coordinate international
operations in transpacific markets.
In the show-cause order, the Department tentatively found that
granting antitrust immunity to each alliance would provide
passengers and cargo with a variety of benefits, including lower
fares on more routes, increased services, better schedules, and
reduced travel and connection times. Each proposed alliance
would enhance competition, particularly in transpacific
markets.
On December 11, 2009, the United States and Japan initialed an
agreement that would establish an Open-Skies aviation relationship
between the two countries once it is signed. Under the new
agreement, airlines from both countries would be allowed to select
routes and destinations based on consumer demand for both passenger
and cargo services, without limitations on the number of U.S. or
Japanese carriers that can fly between the two countries or the
number of flights they can operate.
Parties have 21 calendar days to comment and seven business days
to file answers. After this period ends, the Department will
review all filings and then issue a final decision.
In a news release, American said 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 United States – Asia
market.
"An immunized joint business will benefit the U.S. and Japanese
economies, promote increased cultural exchange and provide more
travel choices and greater access to discounted fares for millions
of consumers," said Will Ris, American's Senior Vice President
– Government Affairs. "Once DOT and the Ministry of Land,
Infrastructure, Transport and Tourism of Japan issue final
approvals for the joint venture, then officials from the U.S. and
Japanese governments will sign the Open Skies agreement.
"American is appreciative of the support its application
received from Senate Assistant Majority Leader Dick Durbin of
Illinois and Ranking Member of the Senate Commerce, Science and
Transportation Committee Kay Bailey Hutchison of Texas," said Ris.
"We also thank the Chairman of the Senate Commerce Committee, Jay
Rockefeller of West Virginia, for his consistent support of
alliances.
In a separate news release, United and Continental say that, on
final approval of antitrust immunity and the signing of an Open
Skies aviation agreement between the United States and Japan, the
airlines intend to establish with ANA a first-of-its-kind
trans-Pacific joint venture, jointly managing activities including
scheduling, pricing and sales and offering customers a greater
selection of routings and a wider range of fare and service
options.
“We are pleased with DOT’s action today, and look
forward to offering our customers the full range of benefits under
our alliance with ANA,” said Jeff Smisek, president and chief
executive officer of United Airlines. “We thank the DOT for
their thoughtful review, and look forward to final
approval.”