Delta’s CEO weighs in on open skies with Japan

Washington DC
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Delta chief executive Richard Anderson says the new deal between Japan and the US "begins to open up the skies" between the two countries.

The US and Japan on 11 December reached the historic pact after five rounds of negotiations held throughout this year.

Early on in the negotiations Anderson stressed that full access to Haneda airport should be a key point in the discussions. Through its merger with Northwest Airlines that closed in October 2008 Delta now has a strong presence at Tokyo Narita airport, which is further away from the city centre.

Today during Delta's investor day carrier CEO Richard Anderson said that he believes the industry came to a consensus "in terms of interactions with the negotiators".

Terms of the open skies agreement allow for four daily slots each at Haneda for US and Japanese carriers to operate transpacific flights from 12pm to 7am once a fourth runway opens next year. Originally the window began at 10pm, but after the US argued that gave Japanese carriers an advantage in positioning their aircraft, a compromise was reached to have flights depart at midnight.

The Japaese government plans to increase the annual number of slots at Narita airport from 200,000 to 220,000 in March 2010. Through the open skies deal between 2010 and March 2015, or when the number available slots at Narita airport reaches 300,000, US carriers will gain 11% of every 20,000 slots made available, which is roughly 2,190 slots or three flights per day. If Narita reaches the 300,000 slot level, US carriers could claim as many as 12 flights per day.

"Most importantly," says Anderson, "The Japanese government fairly wisely has conditioned open skies on anti-trust immunity for ANA [All Nippon Airways] and Japan Airlines and their partners of choice."

A US government official says finalizing the open skies deal depends on how long the anti-trust application process takes with the DOT, but it could happen around August or October of next year.

The DOT must also conduct an award process for the slots awarded to US carriers at Haneda. The government's official stresses that reports DOT would grant those slots to non-immunised carriers are pure speculation.

However, the official says DOT might consider a consolidated process in reviewing anti-trust immunity applications for transpacific routes. Star Alliance partners ANA, Continental and United have stated their desire to gain anti-trust approval.

It could take Japan Airlines longer to achieve the same approval as both American and Delta have offered competing financing packages to the carrier.

American and TPG have offered $1.1 billion in order to keep JAL in Oneworld, while Delta and members of the SkyTeam alliance have offered $1 billion to lure JAL into their alliance.