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United Fears Delay in JAL Resolution

Stocks in this article: UAUA

Currently, American and JAL are in Oneworld; United and ANA are in Star; and Delta is in Skyteam. Through its 2008 acquisition of Northwest, Delta secured a Tokyo hub with beyond rights. Northwest and Pan Am were both awarded Tokyo hubs with beyond rights in 1947: United purchased the Pan Am operation in 1985 for $750 million, widely considered the best deal ever made by an airline. United remains the largest U.S. carrier in the Pacific region, in terms of capacity, despite the Delta/Northwest merger.

In recent decades, partially because of the unprecedented rights held by the two U.S. carriers, Japan has been reluctant to grant additional access, and the bilateral aviation agreement between the U.S. and Japan has long been among the world's most restrictive. That is changing, however. "We are at a historic crossroads, with a once in a decade-opportunity with open skies, after 11 years of discussion between the two countries," Schwab said.

The recent opening of Tokyo Haneda Airport also plays a role in the talks. The Japanese would like to maintain Narita's strength, while also encouraging service to Haneda. their solution is to open Haneda to U.S. flights between 10 p.m. and 7 a.m., when Narita is closed. The hours are not conducive to trans-Pacific flight schedules, but U.S. negotiators have agreed to consider Haneda flights as part of an open skies agreement that would provide unlimited rights to Tokyo. Schwab said United would be likely to operation at least one and possibly two flights to Haneda, providing flight options at a different time of day.

-- Written by Ted Reed in Charlotte, N.C. .

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