- CEOs of all oneworld airlines reaffirm support to their Japanese partner
- US$1.8 billion investment and increased revenue pledged
- Best partners, hubs and network fit - and best for premium customers
- Best chance for stable and successful future
<p><location>VANCOUVER</location>, British Columbia, <chron>Dec. 2</chron> /CNW/ -- The leaders of all <location>Japan</location> Airlines' partners in the oneworld® alliance issued this declaration today to their colleagues at the airline, to the Japanese government and to the country's flying public: oneworld is by far the best alliance for JAL.</p>
<p>To reinforce their commitment to retaining JAL as a valued, full member of the world's leading quality airline alliance, they have put together a "total alliance value proposition" for JAL totaling some US$1.8 billion of investment and additional revenue, which outstrips by threefold any other offer to lure JAL away from oneworld. For a detailed breakdown, see below.</p>
<p>The package was finalised at a meeting of the oneworld Governing Board today, on the sidelines of an International Air Transport Association (IATA) event in <location>Montreal</location>, <location>Canada</location>.</p>
<p>The Chief Executives of the alliance's ten other member airlines reaffirmed their belief that oneworld offers JAL by far the best revenue opportunities, the best access to funding, the best network fit, the best quality partners, the best hubs, the best experience to help it adapt to the new competitive and financial environment - and the best prospect for a stable and successful future.</p>
<p>oneworld Governing Board Chairman and American Airlines' Chairman and Chief Executive Gerard Arpey said: "The oneworld alliance already has a significant investment in the success of <location>Japan</location> Airlines, and we are prepared to do even more to ensure that American, oneworld and JAL have a successful partnership for the long-term. We believe this in turn will allow JAL to produce significant benefits for all of its stakeholders - the travelling public, employees and investors, and certainly the Japanese tourism and aviation industries.</p>
<p>"The total alliance value proposition developed by American Airlines, as JAL's biggest partner, our fellow members of oneworld and our financial partners TPG, is very clearly vastly superior in every aspect to anything anyone else is offering. When you add up the facts, the most value and best long-term solution for JAL comes from remaining with oneworld so that it can continue to focus with partners on building a stronger foundation for the future."</p>
<p>Speaking on behalf of the other oneworld CEOs, oneworld Managing Partner John McCulloch added: "<location>Japan</location> Airlines is a highly valued member of oneworld - and oneworld and its member airlines are determined to build on our long-standing, successful and mutually beneficial working relationships with JAL. A change in alliances, at the best of times, carries a great deal of risk. Doing so at a time when the industry is experiencing such turbulence adds even more danger.</p>
<p>"oneworld's proposals are based on years of experience of working with <location>Japan</location> Airlines. So apart from the overall vastly superior offer we are collectively making, we also deliver certainty and stability."</p>
Key elements of the "total alliance value proposition" include proposals
-- Invest in the restructuring of JAL, through a link with the TPG
investment group, which has indicated it, with American Airlines,
be willing to provide funding of up to US$1.1 billion, should this be
welcomed by the airline and the Japanese government.
<p>TPG is the world's most experienced and successful investor in the airline industry, presenting JAL and the Japanese government with far wider funding resources than would be available through any other airline grouping.</p>
-- Develop an anti-trust immunised (ATI) joint venture agreement across
the Pacific with American Airlines, with an application for ATI to be
filed immediately after agreement is reached between the government of
Japan and USA for "open skies" between the two countries.
<p>This would result in far more extensive co-operation between American Airlines and JAL - leading to some US$100 million a year in revenue for the Japanese carrier on top of the US$500 million a year it already enjoys through its oneworld relationships. Enhancing its links with American in this way would, over a 10-year period, represent additional revenues of some US$700 million on a net present value basis.</p>
<p>Regulators in the US are likely to give an American-JAL partnership speedy ATI approval, as it would foster balanced competition among airline alliances across the Pacific, maintaining the share of Japan-USA passenger traffic among the three global alliances at around one-third each.</p>
<p>If JAL were to consider joining another alliance, in this case SkyTeam, it would raise intractable competition issues and face severe regulatory opposition in the US because of the stranglehold this combination would hold on Japan-USA travel, with more than 60 percent of the market. This also would provide SkyTeam and Star a 93 percent duopoly and reduce competition rather than increase or maintain it - whereas the US regulators have promoted inter-alliance competition to increase, not reduce, inter-alliance competition and consumer choice. It is in the best interests of customers flying between the USA and <location>Japan</location> to have three robust alliances competing for their business instead of two. For this reason, it is hard to envisage a scenario in which JAL-Delta could achieve immunity on any commercially acceptable basis. The position is exacerbated by SkyTeam's Delta/Northwest operating a hub alongside JAL at its <location>Tokyo</location> Narita base.</p>
<p>With JAL's main domestic competitor All Nippon Airways (ANA) also widely expected to file for transpacific ATI with its Star partner United Airlines, American Airlines represents most likely the only opportunity for JAL to gain ATI with a US partner, with all that means in terms of strengthening its competitive position and increasing its revenues. Even a delay in applying for - and therefore in receiving - ATI could put JAL at a disadvantage to its nearest competitor.</p>
-- Expand co-operation with the two European carriers serving Japan -
British Airways and Finnair - to provide JAL with substantially
improved access to Europe over two of the continent's most attractive
gateways for Japanese travellers, in London Heathrow and Helsinki.
<p>British Airways (BA) also is proposing far more extensive co-operation with JAL, including code-sharing far more widely across each other's networks.</p>
<p>At BA's <location>London</location> Heathrow hub, JAL and all other oneworld on-line partners, along with some BA services, have just consolidated operations in Heathrow's Terminal 3, where later this month JAL will start sharing BA's lounges for premium customers.</p>
<p>At <location>Tokyo</location> Narita, BA plans to move its operations into Terminal 2, alongside those of JAL and all other on-line oneworld partners.</p>
<p>These developments would radically improve the connectivity and network reach JAL could provide throughout <location>Europe</location>, delivering further substantially increased revenue.</p>
<p>With the strong financial and business links between the UK and <location>Japan</location>, <location>London</location> Heathrow is by far the most popular destination in <location>Europe</location> for premium passengers flying between the continent and <location>Japan</location>.</p>
<p>Additionally, Finnair's <location>Helsinki</location> hub is growing in importance and attractiveness as a gateway between <location>Asia/Pacific</location> and <location>Europe</location>, thanks to its geographical position and investment by the airport owner in excellent transfer facilities. Finnair is offering to work far more extensively with JAL over <location>Helsinki</location>, with more wide-spread code-sharing providing another excellent prospect, besides <location>London</location> Heathrow, for seamless connections throughout <location>Europe</location> and more revenue opportunities.</p>
-- Develop its presence in the attractive Latin America market through
expanded relationships with oneworld partners LAN and Mexicana.
<p>oneworld's members serve 60 percent more destinations than other alliances in the competitive <location>South America</location> region, and both oneworld partners in Latin America, LAN and Mexicana, have offered to code-share far more widely with JAL. For example, Mexicana recently received approval to place the JL code on its Vancouver-Mexico City flights, following JAL's recent decision to suspend its own flights on this route. These actions will ensure that JAL's customers have the best network and co-operation opportunities in this increasingly important part of the world.</p>
-- Increase code-sharing with other oneworld members, building revenue
JAL still further. Iberia has proposed to JAL an expansion in the
number of destinations covered by their code-share agreement. Talks
with a similar aim are also currently underway between Cathay Pacific
Airways and JAL.
-- Identify opportunities for increased airport co-location for JAL
alongside its oneworld partners at more key airports worldwide, making
it easier for passengers to transfer between the airline's flights and
those operated by its alliance partners, strengthening its competitive
positioning still further.
<p>British Airways' planned terminal move at <location>Tokyo</location> Narita will complete the consolidation of all on-line oneworld partners alongside JAL in its Terminal 2 base there. With all the alliance's other on-line carriers co-located since 2007, it has almost halved minimum connections times between their flights at the airport to as little as 60 minutes, and made the overall transfer process smoother and easier.</p>
<p>Like <location>London</location> Heathrow and <location>Helsinki</location>, oneworld hubs are generally regarded as far more attractive transfer hubs for Japanese travellers, and more co-location will make them more attractive still.</p>
-- Draw on Qantas' expertise in developing its Jetstar, value-based
airline and its two-brand strategy.
<p>Qantas is widely recognised as the world leader in developing a value-based airline within a traditional network airline group and operating its business as a two-brand offering. It has offered JAL full access to this expertise should it be interested in drawing upon it, enabling it to maximise its ability to compete in a sector of growing importance in today's airline industry environment.</p>
<p>The oneworld package also stresses that remaining with oneworld will enable JAL to stay part of:</p>
-- A partnership with American Airlines that provides the best access for
premium customers on trans-Pacific flights. Some alliances might focus
on airlines' ability to deliver more passengers, but what matters most
is the quality of the passenger revenue. In the USA, for instance,
oneworld's hubs include the business centres of Los Angeles, Chicago,
Miami, New York and Dallas/Fort Worth. oneworld analysis indicates
that if JAL chooses to move its main US transfer hubs to an alliance
with bases in such places as Minneapolis/St. Paul, Detroit, Salt Lake
City and Atlanta, then it would likely lose a great deal of passenger
traffic - particularly premium travellers - to its competitors.
-- The world's leading quality alliance. oneworld has the highest
partners from each region worldwide. They are all carriers it can
comfortable in passing on its most valued customers. They win more
alliance proportionately than competitors in other alliances - and
oneworld has itself extended its lead as the most prolific winner of
alliance awards, picking up the World Travel Awards' Leading Airline
Alliance title for the seventh year running. oneworld is the only
alliance to have won this award since it was first introduced.
-- The only alliance with a truly global network, as the only alliance
member airlines based in every continent and the only alliance with
member based in South America, in Australia or in Asia's Middle East.
-- The only alliance whose member airlines have collectively been
profitable since its emergence a decade ago, with oneworld member
airlines reporting collective net profits of US$8.3 billion in 10
since oneworld was launched.
-- With oneworld, Japan Airlines would also avoid a massive network
overlap. In Asia, SkyTeam members Delta/Northwest, Korean and China
Southern all compete for the same regional slice of the alliance pie
that in oneworld JAL has to itself. Avoiding network overlap
maximizes passenger and revenue flows to JAL from its alliance
partners, helping keep more of its routes and frequencies financially
<p>oneworld brings together some of the best and biggest names in the airline business - American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, <location>Japan</location> Airlines, LAN, Malev Hungarian Airlines, Mexicana, Qantas and Royal Jordanian, and around 20 affiliates including American Eagle, Dragonair, LAN <location>Argentina</location>, LAN <location>Ecuador</location> and LAN <location>Peru</location>. Russia's S7 Airlines will join the alliance in 2010.</p>
Between them, these airlines:
-- Serve almost 750 airports in nearly 150 countries, with some 8,500
-- Offer nearly 550 airport lounges for premium customers.
-- Carry some 330 million passengers a year.
-- Employ 300,000 people and operate almost 2,500 aircraft.
-- Generate some US$100 billion annual revenues in total.
<p>It is the only alliance with any airlines based in <location>South America</location>, <location>Australia</location> or Asia's <location>Middle East</location>.</p>
<p>The alliance enables its members to offer their customers more services and benefits than any airline can provide on its own. These include a broader route network, opportunities to earn and redeem frequent flyer miles and points across the combined oneworld network and more airport lounges. oneworld also offers more alliance fares than any of its competitors.</p>
<p>oneworld was voted the World's Leading Airline Alliance for the seventh year running in the latest (2009) World Travel Awards. It is the only winner of this award since it was introduced in 2003.</p>
For further information: For further information: oneworld, Michael Blunt, VP Corp Comms, +44 7711 997487, firstname.lastname@example.org; or American Airlines, Corporate Communications, +1-817-967-1577, email@example.com; or British Airways, Press Office, +44 20 8738 5100, firstname.lastname@example.org; or Elin Wong, Cathay Pacific, Corporate Comms Manager Overseas, +852 2747 5362, email@example.com; or Finnair, Corporate Communications, +358 981 84970; or Iberia, Communications, +34 91 587 7462, prensaintl@Iberia.es; or JAL, Szehunn Yap, PR, +81 3 5460 3109, firstname.lastname@example.org; or LAN, Corporate Communications, +562 565 3975; or Malev, Adam Hegedus, Corporate Comms, +36 1 235 3331, email@example.com; or Mexicana, Adolfo Crespo, Senior VP Customer Service & Corporate Comms, +5255 5448 3296, firstname.lastname@example.org; or Qantas, Corporate Communications, +61 2 9691 3473, email@example.com; or Royal Jordanian, PR, Iman Rihani, +962 6 520 2060, firstname.lastname@example.org, or Basel Kilani, +962 6 520 2062, email@example.com