Japan Airlines (JAL) has chosen to stay with the Oneworld alliance, and will apply for anti-trust immunity on transpacific routes with alliance member American Airlines.
JAL's decision ends months of competition between Oneworld and SkyTeam to woo the carrier, with SkyTeam and Delta Air Lines offering a $1 billion financial package to persuade JAL to switch alliances.
American and Oneworld subsequently counter-offered with a $1.4 billion package to JAL, which filed for bankruptcy protection and embarked on a restructuring process last month.
JAL and American will now jointly apply to the US Department of Transportation (DOT) and Japan's Ministry of Land Infrastructure, Transport and Tourism for anti-trust immunity on transpacific routes.
"Upon receiving the approval from the relevant authorities, JAL and AA intend to enter a joint business venture which will enhance their scope of cooperation on the routes between the United States and Japan," says JAL.
This will be achieved through "adjustments to their respective networks, flight schedules and other business activities, allowing both carriers to better complement each other to develop and offer competitive products and quality services to their customers."
JAL Group's chief operating officer and president Masaru Onishi says: "We have analysed this issue in great detail, and we are excited at the prospects in terms of the convenience and benefits for our customers.
"We also firmly believe that the advantages of this development with American Airlines can strongly support JAL at a time when we are striving towards the revival of our business."
The carrier will also strengthen its relationships with other members in Oneworld, in order to "provide customers a comprehensive range of products and services", it says.
American's chairman and chief executive and Oneworld governing board chairman Gerard Arpey welcomes JAL's decision.
"We respect this was an important decision for Japan Airlines and the government of Japan, and we believe they have made the right choice for JAL's many stakeholders, for Japan's national interests and for consumers," he says.
American and its Oneworld airlines look forward to working with JAL to create a stronger partnership through commercial enhancements and assistance, he adds.
"American remains confident that the anti-trust immunity (ATI) application will meet DOT's pro-consumer and pro-competition criteria for granting ATI, which will pave the way for our two airlines to operate a joint venture between US and Japan," says Arpey.
Responding to JAL's decision, Delta says customers can continue to count on it for "unmatched access" to Japan, with non-stop services between 10 USA destinations and Tokyo.
"With recently announced plans to invest $1 billion in our product, Delta remains committed to providing a leading option for travel across the Pacific," it adds.