The U.S. Department of Transportation on Wednesday tentatively
granted antitrust immunity to two competing joint ventures centered on transpacific
U.S.-Japan service. The approval of those agreements— one between American
Airlines and its Oneworld partner Japan Airlines and the other between Star
Alliance members All Nippon and the recently merged United Airlines and
Continental Airlines—moves forward and is predicated on a final Open Skies pact
between the two countries.
DOT said it would give interested parties three weeks to reply to
Wednesday's tentative decision, after which it would finalize approval.
The Open Skies bilateral agreement between the United States and
Japan, agreed to by negotiators last December, required the approval of antitrust immunity applications between carriers from both countries before
moving onto final passage. Conversely, the joint ventures could not progress
unless there is an Open Skies agreement.
ANA, Continental and United announced their joint venture last
December, through which the airlines would jointly set schedules and fares and
coordinate networks between the United States and Japan. Following more than
two months of indecision as to whom it would pick as its U.S. alliance partner,
Japan Airlines in February reaffirmed its loyalties to Oneworld and proceeded with a parallel antitrust-immune joint venture with American Airlines. DOT
filed both applications into one docket to expedite approval.
Based on July 2010 OAG data cited by DOT, the immunized Star
carriers would have nearly 36 percent of the seats connecting Japan and the United
States, while the immunized Oneworld carriers would have 26 percent. Meanwhile,
immunized SkyTeam carriers, which were not involved in this particular
antitrust immunity request, hold about 34 percent of the market, DOT said.
"Delta and Korean Air currently operate with immunity, have a
strategically placed immunized connecting hub in Seoul, and have a sizable
presence in the U.S.-Asia market," DOT said in its tentative order.
DOT said it also examined the competitive impacts on a
route-by-route basis and determined the approvals would benefit the public.
"By sharing risk and optimizing the joint network, the Star applicants and
Oneworld applicants each state that they will be able to accelerate the
introduction of new capacity, give consumers more travel options and shorter
travel times and reduce fares," DOT noted in its tentative order.