Japan Airlines Seeks European Venture With British Airways

Japan Airlines Co. and British Airways applied to form a venture on Japan-Europe routes that would let them share revenue, coordinate schedules and potentially add new services.

JAL is seeking antitrust immunity for the plan from Japan’s Ministry of Land, Infrastructure, Transport and Tourism, it said in a statement today. British Airways, a unit of International Consolidated Airlines Group SA, has contacted the European Union, it said.

British Airways and JAL are both members of the Oneworld global airline alliance that also includes AMR Corp.’s American Airlines and Cathay Pacific Airways Ltd. The group fought off overtures from competing alliance SkyTeam, led by Delta Air Lines Inc. and Air France-KLM Group, to lure away JAL, while the Japanese carrier was dealing with bankruptcy in 2010.

“We have very close links with JAL and look forward to enhancing that relationship,” Willie Walsh, Chief Executive Officer of IAG, British Airways’ parent company, said in a statement. “Despite the difficulties the Japanese aviation market has faced in recent years, we have great confidence in JAL’s business outlook and the overall market’s future prospects.”

Asia Ambitions

IAG, created last year by the merger of British Airways and Spain’s Iberia, aims to increase its presence in Asia. The company currently allocates about 31 percent of its capacity to North American routes and 9 percent to Asia-Pacific flights, according to a presentation.

JAL exited bankruptcy last year after cutting a third of its workers, grounding planes and receiving funding from the country’s largest banks. The airline is planning an initial public offering that may raise as much as 1 trillion yen ($13 billion) as early as September, two people familiar with the matter said in January.

“IAG would look closely at investing in JAL,” said Lorena Monsalves, a London-based spokeswoman for IAG.

British Airways currently operates a daily service from London’s Heathrow to Tokyo’s Narita airport and five times weekly to the city’s Haneda airport, according to Monsalves. JAL flies daily services from Tokyo Narita to Heathrow, Frankfurt and Paris Charles de Gaulle, as well as three times a week to Moscow.

As antitrust immunity has yet to be granted, IAG can’t confirm which routes may be included in the joint-venture, Monsalves said.

All Nippon Airways Co., Japan’s largest listed carrier, formed a similar pact with Deutsche Lufthansa AG last year, as airlines boost cooperation to counter rising fuel costs and to offer easier travel options for customers. JAL and British Airways also have separate accords with American Airlines, covering routes between their home markets and the U.S.

(Updates with comment from IAG CEO in fourth paragraph, comment on investment in seventh paragraph.)
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