08/02/2012 16:12
International Airlines Group and Japan Airlines on Wednesday announced plans for a joint venture that would seek to maximise the profitability of routes between Europe and Japan.
JAL and British Airways, IAG’s UK subsidiary, want to create a partnership business that would coordinate flight schedules between Europe and Japan and share revenues.
A number of airlines are forming joint ventures on their core routes because foreign ownership rules in many countries prohibit mergers between carriers.
Such partnerships are more important than the three global airline alliances – oneworld, SkyTeam and Star – because the joint ventures can combine their schedules so as to provide more daily flights to lucrative business customers. The alliances are looser arrangements aimed at promoting code-sharing between the participating carriers.
However, the joint ventures have been subjected to intense scrutiny by regulators to determine whether they are adversely affecting passengers by limiting competitive pressure on ticket prices.
On Wednesday, JAL asked Japan’s Ministry of Land, Infrastructure, Transport and Tourism for anti-trust immunity so the airline can co-operate with BA on flights between Europe and Japan. IAG has also presented the joint venture plans to the European Commission.
BA and JAL are both members of the oneworld alliance, and Willie Walsh, IAG’s chief executive, said: “We have very close links with JAL and look forward to enhancing that relationship further.
“Despite the difficulties the Japanese aviation market has faced in recent years, we have great confidence in JAL’s business outlook and the overall market’s future prospects.”
JAL filed for bankruptcy in 2010, but the state-backed Enterprise Turnaround Initiative Corporation subsequently invested Y350bn in a revival plan for the airline, and it is now generating profits. A public offering and relisting could happen this year.
Mr Walsh last year raised the possibility of IAG investing in JAL once it reemerged from bankruptcy, although foreign ownership rules mean it would be a minority stake.
IAG feared JAL could defect from oneworld to SkyTeam, but it has decided to stick with its existing alliance.
Masaru Onishi, JAL’s president, said: “JAL seeks to continue improving customer experiences all around, including through tighter cooperation with our quality partners as the industry liberalises.”
JAL last year established a joint venture with American Airlines, the leading US carrier in oneworld, on Pacific routes. All Nippon Airways – another major Japanese airline – has a partnership with United-Continental on Pacific routes.
ANA has a joint venture with Lufthansa on routes between Japan and Europe.
US and European airlines have formed joint ventures on north Atlantic routes. Lufthansa collaborates United-Continental, Air-France KLM with Delta Air Lines, and IAG with American Airlines.
JAL and British Airways, IAG’s UK subsidiary, want to create a partnership business that would coordinate flight schedules between Europe and Japan and share revenues.
A number of airlines are forming joint ventures on their core routes because foreign ownership rules in many countries prohibit mergers between carriers.
Such partnerships are more important than the three global airline alliances – oneworld, SkyTeam and Star – because the joint ventures can combine their schedules so as to provide more daily flights to lucrative business customers. The alliances are looser arrangements aimed at promoting code-sharing between the participating carriers.
However, the joint ventures have been subjected to intense scrutiny by regulators to determine whether they are adversely affecting passengers by limiting competitive pressure on ticket prices.
On Wednesday, JAL asked Japan’s Ministry of Land, Infrastructure, Transport and Tourism for anti-trust immunity so the airline can co-operate with BA on flights between Europe and Japan. IAG has also presented the joint venture plans to the European Commission.
BA and JAL are both members of the oneworld alliance, and Willie Walsh, IAG’s chief executive, said: “We have very close links with JAL and look forward to enhancing that relationship further.
“Despite the difficulties the Japanese aviation market has faced in recent years, we have great confidence in JAL’s business outlook and the overall market’s future prospects.”
JAL filed for bankruptcy in 2010, but the state-backed Enterprise Turnaround Initiative Corporation subsequently invested Y350bn in a revival plan for the airline, and it is now generating profits. A public offering and relisting could happen this year.
Mr Walsh last year raised the possibility of IAG investing in JAL once it reemerged from bankruptcy, although foreign ownership rules mean it would be a minority stake.
IAG feared JAL could defect from oneworld to SkyTeam, but it has decided to stick with its existing alliance.
Masaru Onishi, JAL’s president, said: “JAL seeks to continue improving customer experiences all around, including through tighter cooperation with our quality partners as the industry liberalises.”
JAL last year established a joint venture with American Airlines, the leading US carrier in oneworld, on Pacific routes. All Nippon Airways – another major Japanese airline – has a partnership with United-Continental on Pacific routes.
ANA has a joint venture with Lufthansa on routes between Japan and Europe.
US and European airlines have formed joint ventures on north Atlantic routes. Lufthansa collaborates United-Continental, Air-France KLM with Delta Air Lines, and IAG with American Airlines.
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