US gives limited approval to Hawaiian-Japan Airlines venture

Japan Airlines is cleared to sell Hawaiian’s flights. (AP)
Updated 04 October 2019

US gives limited approval to Hawaiian-Japan Airlines venture

  • Hawaiian Airlines said it was disappointed by the decision
  • Hawaiian indicated that it would dispute the decision during a 14-day comment period.

WASHINGTON: The Trump administration rejected a bid by Hawaiian Airlines and Japan Airlines for antitrust immunity to let them expand a partnership.

The Transportation Department said it plans to let the airlines sell each other’s flights and coordinate marketing and frequent-flyer programs for service between Hawaii and Japan, but without antitrust immunity they won’t be able to coordinate prices and schedules.

Hawaiian Airlines said it was disappointed by the decision.

“The tentative decision recognizes the consumer benefits of our joint venture, but it overlooks the importance of antitrust immunity that major global airline alliances already enjoy, harming a small US carrier like Hawaiian by preventing it from being able to compete on equal footing” with rivals, the airline said.

American, Delta and United have antitrust immunity for partnerships with foreign carriers.

Hawaiian indicated that it would dispute the decision during a 14-day comment period.

The Transportation Department said the airlines could get the same benefits from working together without antitrust immunity. Consumer advocates contend that antitrust immunity for airlines inhibits competition and leads to higher fares.

If the department’s ruling is made final, the airlines could cross-sell flights and cooperate in marketing programs for routes between Japan and Hawaii and from Hawaii to 10 other Asian countries, including China and South Korea, if passengers stop in Japan on the way. The deal does not cover flights to or from the
US mainland.


Lufthansa accepts tweaked demands by Brussels over state bailout

Updated 30 May 2020

Lufthansa accepts tweaked demands by Brussels over state bailout

  • Lufthansa and the rest of the airline sector have been hard hit by what is expected to be a protracted travel slump

BERLIN/FRANKFURT: Lufthansa’s management board has accepted a more favorable set of demands from the European Commission in exchange for approval of a $10 billion government bailout, the carrier said on Saturday, paving the way for its rescue.
The agreement comes after the airline’s supervisory board on Wednesday rejected an initial deal with Brussels including conditions that were significantly more painful.
Lufthansa and the rest of the airline sector have been hard hit by what is expected to be a protracted travel slump due to the coronavirus pandemic.
Under the latest agreement, Lufthansa said it will be obliged to transfer up to 24 takeoff and landing slots for up to four aircraft to one rival each at the Frankfurt and Munich airports.
This translates into three take-off and three landing rights per aircraft and day, it said, confirming what sources had earlier told Reuters.
“For one-and-a-half years, this option is only available to new competitors at the Frankfurt and Munich airports,” Lufthansa said, initially excluding budget carrier Ryanair. “If no new competitor makes use of this option, it will be extended to existing competitors at the respective airports.”
The previous deal had included forfeiting 72 slots used by 12 of 300 jets based at the Frankfurt and Munich airports, a source familiar with the matter said.
The slots, to be allocated in a bidding process, can be taken over only by a European peer that has not received any substantial state aid during the pandemic, Lufthansa said.
The Commission said once it has been officially notified by Germany on the aid package it will assess the issue as a matter of priority.
“(Lufthansa’s remedies will) enable a viable entry or expansion of activities by other airlines at these airports to the benefit of consumers and effective competition,” it said in a statement.
The airline’s supervisory board needs to approve the deal, Lufthansa said, adding it would convene an extraordinary general meeting to obtain shareholder approval for the bailout.
The largest German corporate rescue since the coronavirus crisis struck will see the government get a 20 percent stake in Lufthansa, which could rise to 25 percent plus one share in the event of a takeover attempt. A deal would also give the government two seats on Lufthansa’s supervisory board.
Rivals such as Franco-Dutch group Air France-KLM and US carriers American Airlines, United Airlines and Delta Air Lines are all seeking state aid due to the economic effects of the pandemic.
Germany, which has set up a $110 billion fund to take stakes in companies hit by the pandemic, said it plans to sell the Lufthansa stake by the end of 2023.
“The German government, Lufthansa and the European Commission have reached an important intermediate step in the aid negotiations,” the Economy Ministry said in a statement.
It said talks with the Commission over state aid would continue.