Japan Airlines and American Airlines Enter Alliance

Following approval late last year from United States and Japanese regulators, Japan Airlines and American Airlines announced an alliance on Tuesday.  The two airlines have been working cooperatively for fifteen years and can now jointly decide pricing and scheduling.

As noted in The Wall Street Journal, flight services between Japan and the United States were liberalized to improve convenience in accordance with a 2009 “open skies” pact.  In the past, Japan Airlines and American Airlines could only work jointly in a limited sense, such as code-sharing and frequent flyer programs.  With an alliance allowed, the two companies can now make more joint decisions.

According to Businessweek, customers can expect many benefits, like cheaper fares, more routes, and easier connections.  Japan Airlines and American Airlines will operate together on ten trans-Pacific routes.  Announced by Tokyo executives on Tuesday, the two airlines are projected to experience a combined sales boost as well as cost savings of 13 billion yen, or $156 million.  The two airlines will share this revenue, but how this revenue will be divided has yet to be revealed.

This may not be the only alliance Japan Airlines enters into.  Bloomberg reports that Japan Airlines may decide to pursue an alliance with Cathay Pacific Airways Ltd. and other carriers.  Japan Airlines and Cathay Pacific Airways Ltd. currently code-share 33 routes.