Open Skies Accord Paves Way For Joint Ventures That American Says Could Result In Stronger Airlines

American Airlines applauded efforts by Japanese and U.S. negotiators Wednesday for their progress in developing an Open Skies accord that will govern aviation in years to come. American, a founding member of the oneworld Alliance, pressed both countries to reach a final accord in Washington, D.C., this week during the round of talks being held to replace the existing bilateral agreement.

"Open Skies agreements end discriminatory aviation policies and are in the best interest of Japanese and American consumers and airlines alike," said Will Ris, American's Senior Vice President - Government Affairs. "Airlines with antiquated, anti-competitive policy viewpoints might believe that it's OK to leave well enough alone. At American Airlines, it is our experience that Open Skies agreements have proven to increase travel choices and enhance competition, which results in greater benefits to consumers."

By reaching an Open Skies accord, the Japanese and U.S. governments will pave the way for Japanese and U.S. airlines to enter into joint ventures and seek antitrust immunity, which is what American Airlines is proposing to do with its oneworld and long-term partner Japan Airlines (JAL). Antitrust immunity allows airlines to coordinate schedules, operations, routes, seat inventories and fares, and approach corporate accounts jointly rather than separately, which provide consumers with better choices and greater cost savings.

"It is now time for consumers and business travelers between the two nations to benefit from the choices and options that have been available to travelers in many other parts of the world," said Theo Panagiotoulias, American Airlines Vice President - Asia and Pacific. "American Airlines is looking for opportunities to expand our services to and through Japan, which underscores the importance of JAL's role to be oneworld's gateway to Asia through Tokyo. A joint venture with JAL, with whom we've had a 15-year relationship, would allow us to do that.

"Additionally, we strongly believe that an American Airlines-Japan Airlines joint venture would easily win U.S. government antitrust immunity, which will help ensure JAL's short- and long-term success," Panagiotoulias said. "American, oneworld and TPG, one of the world's leading private investment firms, are prepared to offer a total value proposition of in excess of USD $1.8 billion, including direct investment of up to $1.1 billion by American/oneworld and TPG to assist JAL to bolster its financial foundation. This further demonstrates American's strong support for JAL and the Japanese aviation industry, as well as for Japanese consumers and stimulating tourism and commerce for the good of the Japanese economy."

FMI: www.aa.com, www.jal.com, www.state.gov/e/eeb/tra/ata/