Just two months after the U.S. Department of Transportation followed the Japanese government in granting final approval for a joint transpacific business involving American Airlines and Japan Airlines, the two carriers announce they have agreed to launch their joint business on April 1.
The joint business will initially involve the two oneworld members revenue-sharing (and codesharing) on 10 transpacific non-stop routes, two of which American has yet to launch – its New York JFK-Tokyo Haneda service (which American has rescheduled to begin on February 18) and its Los Angeles-Shanghai flight, slated to begin on April 5.
Initially, the two airlines’ 10 new codesharing routes will include JAL’s non-stop flights linking Tokyo Narita with New York, Los Angeles and Vancouver; and its new flight linking Tokyo Haneda with San Francisco.
Meanwhile, JAL will begin codesharing on American’s flights linking Tokyo Narita with Dallas/Fort Worth, New York JFK, Chicago and Los Angeles; American’s new non-stop between New York JFK and Tokyo Haneda; and – once pending Chinese-government approvals for the proposed routes and/or codeshares are given – on American’s flights linking Beijing and Shanghai with Chicago, and Shanghai with Los Angeles.
“The joint business will allow our airlines, and oneworld as a whole, to offer increased service between the United States and Asia … and benefit the U.S. and Japanese economies,” says Art Torno, American Airlines’ vice president – New York. “Asia is an area of increasing growth and it will offer more opportunities for JAL and American and our oneworld partners.”
In preparation for the launch, Japan Airlines (JAL) will move all its departures at Chicago O’Hare International Airport (ORD) – a primary focus of the joint business – to American’s Terminal 3 on March 27. (All incoming international arrivals at O’Hare must arrive at the airport’s Terminal 5, where O’Hare’s U.S. customs and immigration inspection facilities are located.)
American Airlines and JAL say that, along with aligning their transpacific schedules from March 27, their co-location at O’Hare will result greater numbers of connecting possibilities both from inbound Asian flights to other U.S. destinations beyond Chicago and between U.S. domestic flights and outbound flights to Tokyo.
At O’Hare this summer, American and JAL will offer possible connections to 47 U.S. domestic flights on 45 routes within three hours of arrival from Japan. Last summer, the two airlines offered 45 three-hour connections to 43 U.S. domestic routes at ORD. Tokyo-bound from Chicago, the number of two-hour connections at ORD from U.S. domestic flight arrivals leaps this summer to 44 flights on 42 routes, compared with 22 flights and routes last summer.
Including the 10 newly announced codesharing routes, JAL and American will initially be codesharing on a total of 123 routes upon the launch of the new joint business. The number of codeshare routes will increase, says Torno, particularly when third-country governments approve American codesharing on JAL’s routes to Asia beyond Tokyo.
Hiroyuki Hioka, Japan Airlines’ senior vice president – The Americas, says that based on efficiencies already identified in their existing transpacific operations (and not taking into account any new routes, including those American is about to begin to Tokyo Haneda and Shanghai), the partners expect to realize combined revenue benefits and cost savings of at least $150 million in their first year of operating the joint business. “We hope it will increase after the first year,” adds Hioka.
Like the joint transatlantic business American has already launched with British Airways and Iberia, the American-Japan Airlines joint business will be what the two airlines call a “metal-neutral” revenue-sharing arrangement. American’s and JAL’s sales forces will have revenue incentives to sell each other’s flights, particularly to corporate customers. They will also be able to conduct sales activities jointly, improving their mutual efficiency and increasing their each carrier’s brand profile.
In part the revenue incentives will arise from the new joint business being able to offer customers greater access to a wider choice of fares. Although American does not offer premium-economy class seating and has no plans to do so, it can now offer its transpacific customers premium-economy seating on JAL flights, as American is already doing through BA in its joint transatlantic business, notes Jim Carter, vice president of American’s Eastern sales division. Equally, JAL will now be able to offer its customers a range of American Airlines’ discounted business-class and other fares.