Hawaiian Airlines has submitted further detailed information to the US Department of Transportation (DOT) in support of its proposed joint venture with Japan Air Lines, as it strives to gain antitrust immunity for the transpacific alliance.
The Honolulu-based carrier, which already serves numerous routes between the Hawaiian islands and Japan, is looking to continue to expand its network, improve online services, optimize flight schedules, increase capacity and improve frequent flyer mile services. The agreement would impact these Hawaii-Japan routes as well as connecting flights from Hawaii via Japan to 10 other nations in Asia.
On 3 October, the US Department of Transportation had issued a show cause order tentatively approving the agreement between the two airlines, but it stopped short of granting antitrust immunity, which, the airline says, is integral to the venture's success. The deadline to answer the DOT’s concerns was on Tuesday.
The DOT said in its order that the joint venture "provides public benefits that include greater capacity and more travel options" but it did not need antitrust immunity to achieve the venture's proposed benefits. The airline said at the time the tentative approval "overlooks the importance of antitrust immunity that major global airline alliances already enjoy, harming a small US carrier like Hawaiian by preventing it from being able to compete on equal footing and offer more competitive choices to travelers".
“As a smaller carrier with a more limited geographic scope, any joint venture we would have with another carrier is going to look different than a joint venture that involves American or Delta or United or IAG or Lufthansa or Air France-KLM,” Hawaiian’s chief executive Peter Ingram tells FlightGlobal on 12 November. “We have carefully gone through what the DOT said in the show cause order and we have looked to address each of those concerns in our response.”
The DOT pointed out three main issues in the 3 October show cause order: tangible public benefit, geographic scope and commitment to deliver information technology capabilities, Hawaiian says. In its filing, the airline has addressed all of these concerns with specific, detailed information and timelines.
“We are excited to respond to the DOT,” says Brent Overbeek, senior vice president of network planning and revenue management. “Both airlines are committed to how do we make this work because we see value for both of our companies and communities. We spent an inordinate amount of work over the past five weeks to address the areas where the DOT felt that our initial request was missing.”
“There are a number of things we can’t do without antitrust immunity,” chief executive Ingram adds. “In particular, the sharing of revenue on the trunk routes requires us to coordinate on pricing and scheduling with JAL. Absent antitrust immunity we just can’t get into discussions of pricing coordination, scheduling coordination and joint network decisions because we would risk a lawsuit.”
Should an approval come this year, the JV could be fully operational by mid-2020, Ingram says.
In recent months, Hawaiian has announced several new routes to Japan, including a Honolulu-Fukuoka connection due to launch later this month. The airline was also recently granted slots to operate a Honolulu-Tokyo Haneda International airport that will begin from March 2020. Cirium schedules data shows that the new daytime pair will complement its existing nighttime departures from Haneda to Honolulu and Kona.
Hawaiian Airlines currently serves the Asian market with a fleet of Airbus A330-200s. It is expected to take delivery of its first of 10 Boeing 787-9s in early 2021.