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The Honolulu Advertiser
Posted on: Saturday, December 12, 2009

U.S., Japan work out open skies agreement


Associated Press

The U.S. and Japan reached a landmark agreement yesterday to relax limits on flights between the two countries, opening up the possibility of broader cross-border airline alliances and more options for air travelers.

Under the agreement, which still must be finalized by both governments, airlines from both countries would be allowed to select routes and destinations based on consumer demand for passenger and cargo services without limitations on the number of U.S. or Japanese carriers that can fly between the two countries or the number of flights they can operate.

It would remove restrictions on capacity and pricing, and provide unlimited opportunities for cooperative marketing arrangements between U.S. and Japanese carriers.

The agreement likely will prompt Japan Airlines and All Nippon Airways to seek joint ventures with U.S. airlines.

American Airlines now has a codesharing agreement with Japan Airlines, while United Airlines has a codesharing agreement with All Nippon Airways. Delta Air Lines is seeking to lure Japan Airlines away from American and into Delta's SkyTeam alliance.

A joint venture allows airlines to share cost and revenue on certain flights regardless of which airline owns or flies the aircraft. It differs from a simple codesharing agreement in which one airline bears all the cost but another airline might get a share of the revenue for booking a customer on a flight.