A few reports of American Airlines (AA) and Delta Air Lines (DL) discussing possible investments in Japan Air Lines (JAL) have been making their way into the travel news cycles. Normally small investments by one airline into another might be par for the course, but in this case there are big airline alliance ramifications.
JAL is part of the OneWorld Alliance. This is one of the big three airline alliances. OneWorld was once the strongest of the alliances with AA, BA, Iberia, Finnair, Qantas and JAL teaming up for international cooperation. The other two alliances are Sky Team, anchored by Delta/AirFrance-KLM, and Star Alliance, with a principal membership of Lufthansa/United/USAirways/Continental.
But these days, OneWorld is having problems with its antitrust immunity applications. Where both SkyTeam and Star Alliance have received finalized antitrust immunity from DOT, OneWorld is still waiting. The antitrust immunity is important because it allows these airlines to operate as a single entity for their international routes.
The Delta offer of an investment in JAL has electrified the airline alliance world. It is dramatic shot across the bow of AA, BA and Qantas and their other alliance members. If Delta can invest in JAL, it will have far more clout to influence a move to SkyTeam. Plus, Delta will then have insight into marketing and pricing decisions of OneWorld as these alliances compete.
Needless to say, American Airlines is not happy. Nor is BA, Qantas, Iberia, Finnair or any of their other partners. AA, which has already been in talks with JAL about helping them out with millions of dollars of losses, just closed a round of financing that will give them almost $3 billion dollars of additional liquidity. Plus, BA and Qantas are more than likely going to pony up some cash to help their alliance partner in Japan.
Eventually, the OneWorld Alliance will receive its antitrust immunity — everyone else has it. Then keeping the team together will more important than ever and JAL is a strong partner across the Pacific and the top airline in the Japan market.
There is no way that AA and its alliance members will let Delta stick their nose under their alliance tent. But Delta certainly has found a good way to irritate the OneWorld airlines.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
