Japan, U.S. Open Skies Deal Awaits Antitrust Blessings

The recently ironed out Open Skies agreement between the United States and Japan requires the approval of antitrust immunity applications between carriers from both countries before moving onto final passage, a process that could last through much of 2010, the chief negotiator for the United States said this month.

Passage of the agreement now rests on carriers filing their applications and the U.S. Department of Transportation approving them, State Department deputy assistant secretary for transportation affairs John Byerly told BTN this month. United Airlines and Continental Airlines are planning to apply for antitrust immunity with Star Alliance partner and Japan's number-two airline, All Nippon Airways, while Japan Airlines said it was committed to filing for antitrust immunity once it decides which competing $1 billion-plus proposal it will select: that of Oneworld partner American Airlines or Delta Air Lines, whose SkyTeam alliance is the only one without a major Japanese carrier.

Like with any application, "There's no promise that antitrust immunity will be granted, or granted with any set of conditions or lack of conditions," Byerly said. "This is an independent process. What is important is that DOT will not consider an application of antitrust immunity between carriers unless there is the text of the Open Skies agreement for that country."

Byerly said Japan's requirement that its home carriers receive antitrust immunity is not uncommon in the history of aviation bilaterals, noting that Germany and France required similar provisions for the enactment of their Open Skies treaties.

"If DOT approves antitrust immunity, and the Japanese government is ready to go forward, then we would sign this new agreement," Byerly said. "Realistically, this would not happen before the early fall, or Septemberish of 2010. At that point, we would have an Open Skies agreement and if such approvals were granted, that would be effective, and then we'd move forward. If antitrust immunity is not granted—if DOT were to impose conditions not acceptable to the Japanese government—then it would not go ahead."