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AA, JAL Seek Antitrust Immunity

February 16, 2010 By: George Dooley


American Airlines and Japan Airlines (JAL) have filed an application with the U.S. Department of Transportation (DOT) for antitrust immunity to forge a closer relationship and implement a Joint Business Agreement (JBA) governing the operation of their flights between North America and Asia. The airlines also will notify the Ministry of Land, Infrastructure, Transport and Tourism in Japan of the transaction.

"An immunized JBA will benefit the public, offer new competition in the fast-growing Asian aviation marketplace and strengthen the relationship between American and Japan Airlines, which will support JAL's successful restructuring," said Gerard Arpey, American's chairman and CEO. "It will improve customer choice by giving the oneworld Alliance, of which American and JAL are key members, strong hub operations at Tokyo, thus allowing more vibrant competition with other global alliances in northeast Asia and beyond."

"With immunity to enter a JBA, Japan Airlines and American Airlines will be able to cooperate more tightly in raising the quality of our services and thus encourage healthy competition in this promising region for the industry," said JAL Group Chief Operating Officer and President Masaru Onishi. "Furthermore, not only will both carriers be able to improve operational efficiency but most importantly, our valued customers will receive greater benefits and convenience which we hope will place us in a position to always be the airlines of their choice."

Antitrust immunity between American and JAL is made possible by the Open Skies accord reached by the United States and Japan in December 2009. When that agreement becomes effective, it will eliminate the restraints on competition.

Under an immunized JBA, American and JAL will cooperate commercially on flights while continuing to operate as separate legal entities. They will coordinate fares, services and schedules in order to attract new customers and boost revenues. By more closely integrating their networks, the airlines will be able to improve efficiency, find opportunities to lower costs and have greater ability to invest in products, services and fleets, the airlines said.

By working together to provide links for connecting passengers, the airlines can expand customer choice by offering new routes and supporting existing routes that would not be economically viable for the airlines individually, the carriers believe. American and JAL expect more opportunities to expand their codeshare arrangements on flights within and beyond Japan and the U.S. and to create new competition in the transpacific marketplace. Consumers also will continue to receive reciprocal frequent flyer benefits, and eligible customers will continue to have access to the airport lounges of both airlines.



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