TokyoTomo Travel Guide

Japan Airlines decided on February 9 to keep its partnership with American Airlines and remain in the Oneworld alliance. JAL’s public relations office explained that it is the best possible scenario for the airline to continue to reinforce its cooperative ties with its present alliance partner in order to stabilize and rejuvenate its business conditions and turn around the company without any further delay. In the days ahead, both JAL and American Airlines are expected to apply to the respective regulators for the anti-trust immunity (ATI) on the Pacific route. While American Airlines will file for ATI with the US authorities by mid-February, JAL plans to proceed with its filing “in consultation with the local authorities concerned.”

Following the decision by Japan Airline to stay with American Airlines, the airline (AA) issued a comment quoting Gerald Arpey, American Airlines’ Chairman and CEO, as emphasizing, “The decision this time is vitally important for both Japan Airlines and Japanese government and it is also the best possible scenario for JAL’s stakeholders, Japan’s own national interests and valued customers traveling between Japan and USA.” “American Airlines is looking forward to providing Japan Airlines with necessary support for the ongoing rehabilitation,” added Arpey. With regards to filing of the ATI, the anti-trust immunity, he mentioned that American Airlines will start to prepare for the applications within the next few days in coordination with JAL’s new management.

Meanwhile, Delta Airlines commented that it will continue to remain as the largest airline serving between USA and Asia, operating direct flights to 10 destinations in USA, nine in Asia and two in Micronesia from Tokyo Narita, which is its Asian hub. It expects the valued customers to continue to use its excellent route network to USA and Asia from Japan, added Delta.

Source: Travel Vision

Travel Vision Inc. provides information on the travel industry in Japan via "Daily Travel Vision", a Japanese-language e-mail newsletter, and the "Travel Vision" website. There are nearly 110,000 people working in the Japanese travel industry, and Travel Vision is proud to be bringing travel news to more than 30,000 people through Daily Travel Vision.

Edward Bastian, President, Delta Airlines, reaffirmed during a press meeting on January 7 that Delta would propose a partnership with Japan Airlines whether it is an out-of-court or court-led restructuring, commenting on the JAL’s rehabilitation. He stated that without a well-chosen partner, JAL would never be able to realize its long-term growth, stressing time and again that Delta Airlines would be the most logical partner in the interest of JAL.

Delta strives to continue to address its efforts to conclude a partnership with JAL. Asked if Delta would prefer JAL’s court-led restructuring or its out-of-court restructuring, Bastian declined to comment, citing that Delta is not in the position to express an opinion. What is vitally important is, he said, that JAL should choose the best possible strategy to address the realization of its long-term growth. Delta is eager to support JAL on the long-term basis once the airline has its restructuring plan in place, assured President Bastian.

Source: Travel Vision

Travel Vision Inc. provides information on the travel industry in Japan via "Daily Travel Vision", a Japanese-language e-mail newsletter, and the "Travel Vision" website. There are nearly 110,000 people working in the Japanese travel industry, and Travel Vision is proud to be bringing travel news to more than 30,000 people through Daily Travel Vision.

Edward H. Bastian, President, Delta Airlines, and Thomas Horton, Executive Vice President of Finance and Planning and Chief Financial Officer of AMR Corp. and American Airlines, held news conferences in Tokyo on December 3. At the respective news conferences two US airlines made the case that they have the best market presence to help Japan Airlines rebuild its business operations. Both airlines stressed the large strategic merit that it would bring to JAL. At a separate news conference, Delta Airlines announced that the company is prepared to invest over US$1 billion in financial assistance to JAL. American Airlines also explained at its news conference that it is prepared to offer more than US$1.1 billion to help JAL turn around its operations. What became a focal point during the respective news conferences was whether or not a JAL-Delta partnership would be granted ATI, antitrust immunity. The figures unveiled by the respective airlines are different, probably because of a difference in their calculation basis. Both airlines battled over the allegations that experts who formerly worked in U.S. Department of Transportation (DOT) had provided the well-documented figures.

Delta President Bastian told a press conference he was confident that Delta and its SkyTeam partners could bring JAL four times as many US and European passengers as Oneworld, meaning the revenue for JAL would also grow four times as much, stressing that the total benefit Delta and its SkyTeam partners could bring yearly to JAL would be more than US$1 billion, including the estimated value of ATI. Commenting on ATI, antitrust immunity, Jeffrey Shane, former Associate Deputy Secretary, U.S. Department of Transportation (DOT), said that all the previous ATI-related issues received an approval and, besides the market share between the United States and Japan, should JAL join SkyTeam, would be approximately 45 percent, excluding the resort routes which are ruled out by US Government, adding that Star Alliance controls 71 percent of the U.S.-German market where ATI was already granted. Following Shane’s remarks, President Bastian said he was confident that the related precedent would weigh in SkyTeam’s favor and the antitrust immunity would no doubt be granted. Also, he said that beside a total investment of over US$1 billion already committed, Delta and its SkyTeam partners are willing to further support JAL, if Japanese Government wishes to raise more funds with a third-party investor.

Meanwhile, Horton of American Airlines argued during its press meeting that the resort routes should be one of the decisive factors in determining whether or not ATI should be granted, in fact, a SkyTeam-JAL partnership, which would control 62 percent of the Japan-U.S. aviation market followed by Star Alliance, 31 percent and Oneworld, 6 percent, would not be granted antitrust immunity as it apparently impedes fair competition. He also stressed that American and its Oneworld partners were prepared to invest US$1 billion and an alliance with Oneworld would enable JAL to increase its annual turnover by US$600 million even “by conservative estimation,” adding that American enjoys a higher market share of high yield premium class passengers than Delta. If a JAL-SkyTeam partnership is not granted antitrust immunity, Horton reminded, JAL will fail to expect annual revenue from the partnership. Asked to comment on ATI, antitrust immunity at American’s press meeting, Norman Mineta, former Secretary of the United States Department of Commerce and U.S. Department of Transportation, who was also Shane’s superior, pointed out that DOT, U.S. Department of Transportation, will be gravely concerned about a possible collapse of the current well-balanced competition among the alliances (three alliances share one third of market each). It will also become a grave concern for DOT that Oneworld may become “absent” (on certain routes) once ATI is granted to SkyTeam. JAL and Delta will therefore have difficulty clearing regulatory hurdles to be granted antitrust immunity, concluded Mineta.

Source: Travel Vision

Travel Vision Inc. provides information on the travel industry in Japan via "Daily Travel Vision", a Japanese-language e-mail newsletter, and the "Travel Vision" website. There are nearly 110,000 people working in the Japanese travel industry, and Travel Vision is proud to be bringing travel news to more than 30,000 people through Daily Travel Vision.