MEDIA RELEASE PR37395
Oneworld's 'Total Value Proposition' Makes it By Far the Best Alliance for Japan Airlines
VANCOUVER, Dec. 3 /PRNewswire-AsiaNet/ --
- CEOs of all oneworld airlines reaffirm support to their Japanese
partner
- US$1.8 billion investment and increased revenue pledged
- Best partners, hubs and network fit - and best for premium customers
- Best chance for stable and successful future
The leaders of all Japan Airlines' partners in the oneworld(R) alliance
issued this declaration today to their colleagues at the airline, to the
Japanese government and to the country's flying public: oneworld is by far the
best alliance for JAL.
To reinforce their commitment to retaining JAL as a valued, full member
of the world's leading quality airline alliance, they have put together a
"total alliance value proposition" for JAL totaling some US$1.8 billion of
investment and additional revenue, which outstrips by threefold any other
offer to lure JAL away from oneworld. For a detailed breakdown, see below.
The package was finalised at a meeting of the oneworld Governing Board
today, on the sidelines of an International Air Transport Association (IATA)
event in Montreal, Canada.
The Chief Executives of the alliance's ten other member airlines
reaffirmed their belief that oneworld offers JAL by far the best revenue
opportunities, the best access to funding, the best network fit, the best
quality partners, the best hubs, the best experience to help it adapt to the
new competitive and financial environment - and the best prospect for a
stable and successful future.
oneworld Governing Board Chairman and American Airlines' Chairman and
Chief Executive Gerard Arpey said: "The oneworld alliance already has a
significant investment in the success of Japan Airlines, and we are prepared
to do even more to ensure that American, oneworld and JAL have a successful
partnership for the long-term. We believe this in turn will allow JAL to
produce significant benefits for all of its stakeholders - the travelling
public, employees and investors, and certainly the Japanese tourism and
aviation industries.
"The total alliance value proposition developed by American Airlines, as
JAL's biggest partner, our fellow members of oneworld and our financial
partners TPG, is very clearly vastly superior in every aspect to anything
anyone else is offering. When you add up the facts, the most value and best
long-term solution for JAL comes from remaining with oneworld so that it can
continue to focus with partners on building a stronger foundation for the
future."
Speaking on behalf of the other oneworld CEOs, oneworld Managing Partner
John McCulloch added: "Japan Airlines is a highly valued member of oneworld -
and oneworld and its member airlines are determined to build on our
long-standing, successful and mutually beneficial working relationships with
JAL. A change in alliances, at the best of times, carries a great deal of
risk. Doing so at a time when the industry is experiencing such turbulence
adds even more danger.
"oneworld's proposals are based on years of experience of working with
Japan Airlines. So apart from the overall vastly superior offer we are
collectively making, we also deliver certainty and stability."
Key elements of the "total alliance value proposition" include proposals
to:
- Invest in the restructuring of JAL, through a link with the TPG
investment group, which has indicated it, with American Airlines, would
be willing to provide funding of up to US$1.1 billion, should this be
welcomed by the airline and the Japanese government.
TPG is the world's most experienced and successful investor in the
airline industry, presenting JAL and the Japanese government with far wider
funding resources than would be available through any other airline grouping.
- Develop an anti-trust immunised (ATI) joint venture agreement across
the Pacific with American Airlines, with an application for ATI to be
filed immediately after agreement is reached between the government of
Japan and USA for "open skies" between the two countries.
This would result in far more extensive co-operation between American
Airlines and JAL - leading to some US$100 million a year in revenue for the
Japanese carrier on top of the US$500 million a year it already enjoys
through its oneworld relationships. Enhancing its links with American in this
way would, over a 10-year period, represent additional revenues of some
US$700 million on a net present value basis.
Regulators in the US are likely to give an American-JAL partnership
speedy ATI approval, as it would foster balanced competition among airline
alliances across the Pacific, maintaining the share of Japan-USA passenger
traffic among the three global alliances at around one-third each.
If JAL were to consider joining another alliance, in this case SkyTeam,
it would raise intractable competition issues and face severe regulatory
opposition in the US because of the stranglehold this combination would hold
on Japan-USA travel, with more than 60 percent of the market. This also would
provide SkyTeam and Star a 93 percent duopoly and reduce competition rather
than increase or maintain it - whereas the US regulators have promoted
inter-alliance competition to increase, not reduce, inter-alliance
competition and consumer choice. It is in the best interests of customers
flying between the USA and Japan to have three robust alliances competing for
their business instead of two. For this reason, it is hard to envisage a
scenario in which JAL-Delta could achieve immunity on any commercially
acceptable basis. The position is exacerbated by SkyTeam's Delta/Northwest
operating a hub alongside JAL at its Tokyo Narita base.
With JAL's main domestic competitor All Nippon Airways (ANA) also widely
expected to file for transpacific ATI with its Star partner United Airlines,
American Airlines represents most likely the only opportunity for JAL to gain
ATI with a US partner, with all that means in terms of strengthening its
competitive position and increasing its revenues. Even a delay in applying
for - and therefore in receiving - ATI could put JAL at a disadvantage to its
nearest competitor.
- Expand co-operation with the two European carriers serving Japan -
British Airways and Finnair - to provide JAL with substantially improved
access to Europe over two of the continent's most attractive gateways
for Japanese travellers, in London Heathrow and Helsinki.
British Airways (BA) also is proposing far more extensive co-operation
with JAL, including code-sharing far more widely across each other's
networks.
At BA's London Heathrow hub, JAL and all other oneworld on-line partners,
along with some BA services, have just consolidated operations in Heathrow's
Terminal 3, where later this month JAL will start sharing BA's lounges for
premium customers.
At Tokyo Narita, BA plans to move its operations into Terminal 2,
alongside those of JAL and all other on-line oneworld partners.
These developments would radically improve the connectivity and network
reach JAL could provide throughout Europe, delivering further substantially
increased revenue.
With the strong financial and business links between the UK and Japan,
London Heathrow is by far the most popular destination in Europe for premium
passengers flying between the continent and Japan.
Additionally, Finnair's Helsinki hub is growing in importance and
attractiveness as a gateway between Asia/Pacific and Europe, thanks to its
geographical position and investment by the airport owner in excellent
transfer facilities. Finnair is offering to work far more extensively with
JAL over Helsinki, with more wide-spread code-sharing providing another
excellent prospect, besides London Heathrow, for seamless connections
throughout Europe and more revenue opportunities.
- Develop its presence in the attractive Latin America market through
expanded relationships with oneworld partners LAN and Mexicana.
oneworld's members serve 60 percent more destinations than other
alliances in the competitive South America region, and both oneworld partners
in Latin America, LAN and Mexicana, have offered to code-share far more
widely with JAL. For example, Mexicana recently received approval to place
the JL code on its Vancouver-Mexico City flights, following JAL's recent
decision to suspend its own flights on this route. These actions will ensure
that JAL's customers have the best network and co-operation opportunities in
this increasingly important part of the world.
- Increase code-sharing with other oneworld members, building revenue for
JAL still further. Iberia has proposed to JAL an expansion in the
number of destinations covered by their code-share agreement. Talks
with a similar aim are also currently underway between Cathay Pacific
Airways and JAL.
- Identify opportunities for increased airport co-location for JAL
alongside its oneworld partners at more key airports worldwide, making
it easier for passengers to transfer between the airline's flights and
those operated by its alliance partners, strengthening its competitive
positioning still further.
British Airways' planned terminal move at Tokyo Narita will complete the
consolidation of all on-line oneworld partners alongside JAL in its Terminal
2 base there. With all the alliance's other on-line carriers co-located since
2007, it has almost halved minimum connections times between their flights at
the airport to as little as 60 minutes, and made the overall transfer process
smoother and easier.
Like London Heathrow and Helsinki, oneworld hubs are generally regarded
as far more attractive transfer hubs for Japanese travellers, and more
co-location will make them more attractive still.
- Draw on Qantas' expertise in developing its Jetstar,
value-based airline and its two-brand strategy.
Qantas is widely recognised as the world leader in developing a
value-based airline within a traditional network airline group and operating
its business as a two-brand offering. It has offered JAL full access to this
expertise should it be interested in drawing upon it, enabling it to maximise
its ability to compete in a sector of growing importance in today's airline
industry environment.
The oneworld package also stresses that remaining with oneworld will
enable JAL to stay part of:
- A partnership with American Airlines that provides the best
access for premium customers on trans-Pacific flights. Some alliances
might focus on airlines' ability to deliver more passengers, but what
matters most is the quality of the passenger revenue. In the USA, for
instance, oneworld's hubs include the business centres of Los Angeles,
Chicago, Miami, New York and Dallas/Fort Worth. oneworld analysis
indicates that if JAL chooses to move its main US transfer hubs to an
alliance with bases in such places as Minneapolis/St. Paul, Detroit,
Salt Lake City and Atlanta, then it would likely lose a great deal of
passenger traffic - particularly premium travellers - to its
competitors.
- The world's leading quality alliance. oneworld has the highest
quality partners from each region worldwide. They are all carriers it
can feel comfortable in passing on its most valued customers. They win
more alliance proportionately than competitors in other alliances - and
oneworld has itself extended its lead as the most prolific winner of
alliance awards, picking up the World Travel Awards' Leading Airline
Alliance title for the seventh year running. oneworld is the only
alliance to have won this award since it was first introduced.
- The only alliance with a truly global network, as the only
alliance member airlines based in every continent and the only alliance
with any member based in South America, in Australia or in Asia's Middle
East.
- The only alliance whose member airlines have collectively been
profitable since its emergence a decade ago, with oneworld member
airlines reporting collective net profits of US$8.3 billion in 10 years
since oneworld was launched.
- With oneworld, Japan Airlines would also avoid a massive network
overlap. In Asia, SkyTeam members Delta/Northwest, Korean and China
Southern all compete for the same regional slice of the alliance pie
that in oneworld JAL has to itself. Avoiding network overlap maximizes
passenger and revenue flows to JAL from its alliance partners, helping
keep more of its routes and frequencies financially viable.
About oneworld
oneworld brings together some of the best and biggest names in the
airline business - American Airlines, British Airways, Cathay Pacific,
Finnair, Iberia, Japan Airlines, LAN, Malev Hungarian Airlines, Mexicana,
Qantas and Royal Jordanian, and around 20 affiliates including American
Eagle, Dragonair, LAN Argentina, LAN Ecuador and LAN Peru. Russia's S7
Airlines will join the alliance in 2010.
Between them, these airlines:
- Serve almost 750 airports in nearly 150 countries, with some 8,500
daily departures.
- Offer nearly 550 airport lounges for premium customers.
- Carry some 330 million passengers a year.
- Employ 300,000 people and operate almost 2,500 aircraft.
- Generate some US$100 billion annual revenues in total.
It is the only alliance with any airlines based in South America,
Australia or Asia's Middle East.
The alliance enables its members to offer their customers more services
and benefits than any airline can provide on its own. These include a broader
route network, opportunities to earn and redeem frequent flyer miles and
points across the combined oneworld network and more airport lounges.
oneworld also offers more alliance fares than any of its competitors.
oneworld was voted the World's Leading Airline Alliance for the seventh
year running in the latest (2009) World Travel Awards. It is the only winner
of this award since it was introduced in 2003.
Source: oneworld
CONTACT:
oneworld,
Michael Blunt,
VP Corp Comms,
+44 7711 997487,
mblunt@oneworld.com;
or American Airlines,
Corporate Communications,
+1-817-967-1577,
corp.comm@aa.com;
or British Airways,
Press Office,
+44 20 8738 5100,
media.relations@ba.com;
or Elin Wong,
Cathay Pacific,
Corporate Comms Manager Overseas,
+852 2747 5362,
elin_wong@cathaypacific.com;
or Finnair,
Corporate Communications,
+358 981 84970;
or Iberia,
Communications,
+34 91 587 7462,
prensaintl@Iberia.es;
or JAL,
Szehunn Yap,
PR,
+81 3 5460 3109,
sze_hunn.yap@jal.com;
or LAN,
Corporate Communications,
+562 565 3975;
or Malev, Adam Hegedus,
Corporate Comms,
+36 1 235 3331,
hegedus.adam@malev.hu;
or Mexicana,
Adolfo Crespo,
Senior VP Customer Service & Corporate Comms,
+5255 5448 3296,
adolfo.crespo@mexicana.com;
or Qantas,
Corporate Communications,
+61 2 9691 3473,
qantasmedia@qantas.com.au;
or Royal Jordanian,
PR,
Iman Rihani,
+962 6 520 2060,
iman.rihani@rj.com, or
Basel Kilani, +962 6 520 2062, basel.kilani@rj.com
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