Business Travel
More and Cheaper Air Service Coming
On Pacific Routes
Travelers will be among the winners when the U.S. grants antitrust immunity so that Japan Airlines and American Airlines can avoid unnecessary overlaps.
By Martha Lynn Craver, Associate Editor, The Kiplinger Letter
March 12, 2010
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A deal between Japan Airlines and American Airlines will get the nod from the Department of Transportation (DOT), maybe as soon as this fall. It’ll allow the two carriers to eliminate overlapping functions and cut costs while also expanding service to new cities and adding flights on existing routes. That will increase competition with other transpacific airlines, keeping pressure on fares and benefiting travelers. Also figure on a slew of benefit upgrades to secure the continued loyalty of frequent business travelers.
Further down the road: An open skies pact between the U.S. and Japan. Finalizing this agreement is contingent upon the U.S. granting antitrust immunity. The open skies pact will remove the limits on the number of U.S. or Japanese carriers that can fly between the two countries or the number of flights they can operate. The U.S. has open skies agreements with 94 other countries. The Japanese government has resisted such an agreement in the past, but that has changed as its two major carriers have struggled financially.
Part of the agreement includes use of Tokyo’s close-in Haneda Airport by U.S. carriers. The airport was closed to U.S. flights when the larger Narita International Airport was opened in 1978. But Haneda recently increased its capacity, and the U.S. and Japan agreed to open up the airport to four flights a day for U.S. carriers and four flights a day for Japanese carriers flying to the U.S. Narita is an affordable cab ride from downtown Tokyo. Five U.S. carriers have applied for the four flights, but it’s not yet clear when the DOT will make a decision on which carriers will be selected.
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