Hawaiian Airlines (HA, Honolulu) and JAL - Japan Airlines (JL, Tokyo Haneda) have broadened their proposed joint venture to include additional Asia-Pacific connections as well as India and Russia, hoping that the changes will prompt the US Department of Transportation (DOT) to reverse an earlier tentative decision denying antitrust immunity (ATI) to the two carriers.
As previously reported, in October the DOT approved an agreement by the airlines to operate a joint venture between Hawaii and Japan but declined their request for ATI, saying that “antitrust immunity is not required by the public interest because, as currently structured, the agreements would not offer consumers any more benefits than they would be likely to obtain through ordinary commercial cooperation without ATI.”
In a response to the DOT to order to show cause, dated November 12, the airlines argued that without ATI their “incentives will not be aligned through a metal-neutral revenue-sharing joint venture, their contemplated cooperation cannot be fully implemented, and important public benefits will be lost.”
The revised joint venture that is outlined in the filing moves beyond direct Japan-Hawaii flights to include all direct Asia-Hawaii flights, connections between Tokyo and Guam International, South Pacific connecting routes served by Hawaiian including Papeete and Pago Pago plus points in the South Pacific Hawaiian may serve in the future, and adding India and Russia to the scope of the parties’ cooperation.
JAL currently operates to Delhi International and Moscow Domodedovo and aims to launch Bengaluru International and Vladivostok in the first quarter of 2020. These routes can provide additional traffic to Hawaii and the proposed joint venture, the airlines said.
Hawaiian, meanwhile, has planned a new route between Honolulu and Fukuoka to launch in November 2019. It has also been given slots to operate an additional daily Honolulu-Tokyo Haneda service starting in March 2020. Hawaiian currently serves Haneda 11x weekly and will increase the frequency to 18x weekly in addition to a daily service to Tokyo Narita.
The applicants concluded with a request that the DOT finalise its tentative conclusion that the commercial agreements between Hawaiian and JAL are unlikely to substantially reduce or eliminate competition, and urged that the DOT consider the new information provided in their response and reverse its tentative move to deny antitrust immunity.
