Japan, US open talks on liberalising air traffic
Posted: 08 December 2009 0816 hrs

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WASHINGTON: The United States and Japan on Monday opened talks on liberalising air traffic that could shape the course of a bidding war for a slice of ailing giant Japan Airlines.

The two sides started closed-door negotiations in Washington that will likely last three days but may extend until Thursday if both sides wish, said Bill Mosley, a spokesman for the Department of Transportation.

Officials were tight-lipped on the talks. But Japan's Nikkei business newspaper said the two countries may finalise an "open skies" deal, which in theory would permit airlines of the world's two largest economies to fly freely between each other.

The talks come as US carriers bid for a stake in Japan Airlines, which is Asia's biggest carrier but is cutting thousands of jobs and drastically cutting routes to stay afloat despite three government bailouts since 2001.

Partners led by American Airlines last week offered Japan Airlines a 1.1 billion-dollar lifeline, hoping to counter a bid by rival Delta Air Lines which is hoping the Japanese carrier switches allegiances.

The US carriers are seen as stepping up efforts for Japan Airlines and its market on lucrative Asian routes ahead of an open skies accord, which Japanese airlines argue would correct an imbalance in favour of their US counterparts that has been hurting them financially.

Under existing bilateral accords, Japanese carriers run 136 passenger flights each week between the countries – 94 by Japan Airlines and 42 by rival All Nippon Airways – while US carriers fly 296.

But American Airlines' chief financial officer, Tom Horton, argued on a recent trip to Tokyo that the market share was "relatively well-balanced" when looking at alliances rather than individual airlines.

The Oneworld alliance involving Japan Airlines and American Airlines runs 35 per cent of flights, while the Sky Team which includes Delta and its subsidiary Northwest Airlines but no Japanese carrier has 31 per cent, he said.

Another 31 per cent of the flights are run by the Star Alliance, which includes All Nippon Airways, Continental Airlines and United Airlines.


- AFP/so