United Fears Delay in JAL Resolution

United fears that continuing questions about the future of JAL could slow its quest for an even better operating arrangement in Tokyo.
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) -- It may seem that



is sitting pretty at Tokyo Narita, the most important airport in Asia with the fastest aviation growth, but that is not exactly the case.

For all of its advantages at Narita, including the invaluable right to fly beyond Tokyo into Asia, and an unchallenged partnership with Japanese carrier


, United fears that continuing questions about the future of


, the other Japanese carrier, could slow its quest for an even better operating arrangement in Tokyo.

United and ANA intend to file next month for antitrust immunity, which would enable the two carriers to discuss fares and schedules on their trans-Pacific routes. The arrangement would require approval by regulators in both countries.

"We have worked to convince both of our governments that this is the way to move forward, and we want to make sure we don't get stuck in a delay," said Mark Schwab, United senior vice president for Alliances and International Affairs. He said the Japanese government could take several more months to determine what course to follow.

United's two U.S. peers,





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, want to partner with JAL. The battle has escalated to the point that they are both offering to oversee investment of more than $1 billion into the bloated, potentially bankrupt carrier.

Schwab won't say which U.S. partner for JAL he favors. But it seems clear that United would benefit from a continuation of the present arrangement in which American has a partnership with JAL. That partnership means that each of the world's three global aviation alliances has about a third of the traffic between the U.S. mainland and Japan, seemingly the distribution most likely to secure regulatory approval for antitrust immunity.

Delta has maintained that if it were to partner with JAL, the two carriers would have 44% of mainland U.S.-Japan traffic. But if the Delta deal materializes, it is likely American and the Oneworld alliance would end up with a very limited share of the Japan market.

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.