United States, Japan enter into ‘open skies’ agreement

The United Stated and Japan have signed a crucial agreement to ease limits on flights between the two countries, resulting in the possibility of wider cross-border airline pacts as well as more choices for travellers.

The ‘open skies’ agreement is yet to be finalised by the governments of the United States and of Japan.

According to the aviation agreement, airlines from both countries will be allowed to choose routes and destinations, depending on consumer demand, for both passenger services and freight services without any limitations on the number of the United States-based or the Japan-based airlines that can operate services between the two countries or on the number of flights they can operate.

The bilateral deal will also take away curbs on both capacity and pricing, as well as will provide “unlimited opportunities” for cooperative marketing arrangements between the airlines based in the US and in Japan, a statement from the United States Department of Transportation said.

The United States currently has ‘open skies’ agreements in place with countries such as Australia and also the member-nations of the European Union (EU).

According to the US Department of Transportation, the United States-Japan aviation pact will offer chances for growth of operations of the US-based carriers at Narita International Airport, near Tokyo, Japan. Besides, the deal will ensure “fair competition” vis-à-vis the new opportunities at Haneda International Airport, which is located close to the centre of Tokyo city.

A joint venture lets carriers share costs and revenue on some flights, irrespective of which airline owns or flies the plane. But, a joint venture differs from a code-sharing pact in which while one airline bears all the costs, another airline may get a share of the revenue for booking a passenger on a flight.

The text of the United States-Japan ‘open skies’ deal, according to the US Department of Transportation, has been set, but a specific timetable on when the accord will come into force has not been decided.

Delta Air Lines and United Airlines, both based in the United States, are already allowed to fly to some cities in Japan. Delta Air Lines had increased its presence in Asia following its acquisition of Northwest Airlines in 2008.

However, at present, the US-based carriers have limitations both in the routes and also in the number of flights they are allowed to operate to Japan.

American Airlines, a subsidiary of AMR Corporation and based in Fort Worth, Texas, the United States, at present has a code-sharing agreement with Japan Airlines, and another US-based carrier, United Airlines, has a codes-sharing pact with the Japan-based All Nippon Airways.

Reports in the US media say that Delta Air Lines is trying to take Japan Airlines out of its alliance with American Airlines and instead make Japan Airlines join the SkyTeam alliance, of which Delta is a member.