Paul Lewis/Singapore

Japan Airlines (JAL) is putting the final touches to its new code-share agreement with American Airlines, but is still debating the merits of joining British Airways, Cathay Pacific Airways and Qantas to form a planned new global alliance.

The two carriers are due to sign an agreement and unveil the details of their already announced tie-up in early September. The deal will include code-share flights on some 100 transpacific and American domestic routes connecting with JAL services to Atlanta, Chicago, Hawaii, Los Angeles, New York and San Francisco.

American and JAL plan to begin implementing the agreement from late October. The two already operate a joint frequent flier programme and co-operate extensively in computer reservations systems and air cargo services. JAL, however, is not yet convinced of the need to join the US carrier's other existing and prospective partners.

"We're not entirely convinced a multilateral alliance is workable," says a senior JAL source. "We're not interested in one-sided alliances, there has got to be something in it for both partners. Some carriers are in too much of a hurry and some want too much."

Several major carriers are known to have been in discussions with JAL, including BA and Cathay. The latter in particular is keen to work with JAL to shore up its traditionally lucrative services to Japan, which have been severely affected by recent economic difficulties. Falling traffic has already forced Cathay to suspend its Sapporo service.

Cathay, in the meantime, is working to finalise its alliance arrangements, which, in addition to American and BA, are understood to include Canadian Airlines and Qantas. An announcement on the yet to be named new alliance could come as early as October, say airline insiders.

BA has already revealed in a recent letter to its Executive Club members plans to form a new frequent flier programme with Cathay from 1 February, 1999, which replaces the soon to be disbanded Passages scheme. Cathay parent company Swire Pacific has denied any move on its part to sell equity in the carrier to BA.

Before any code-share services could be implemented with American, the Hong Kong Government would need to revise its three-year-old bilateral air service agreement with the USA.

Source: Flight International