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  • DOT denies Hawaiian, Japan Airlines immunity benefits

DOT denies Hawaiian, Japan Airlines immunity benefits

US regulators say the proposed joint venture between Hawaiian Airlines and Japan Airlines is not anti-competitive but does not merit their request for antitrust immunity.

The US Department of Transportation on 3 October issued a show cause order tentatively approving the agreement between both companies.

Hawaiian intends on "emphasising" to the DOT the consumer value of its request for antitrust immunity, the Honolulu-based airline says in a statement.

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," the airline says.

Japan and Hawaiian joint venture goals include expanding route networks, improving online services, optimizing flight schedules, increasing capacity and improving frequent flyer mile services. The agreement would impact flights between Hawaii and Japan, along with connecting flights from Hawaii via Japan to 10 other nations in Asia.

Alliances of carriers, including Oneworld and Star Alliance, share revenues and coordinate schedules with antitrust immunity. The DOT says in its order that the Hawaiian and Japan joint venture "provides public benefits that include greater capacity and more travel options" but did not need antitrust immunity to achieve the venture's proposed benefits.

"The benefits described in the application do not meet the department’s threshold of providing public benefits that could not otherwise be attained," the DOT states.

"The department requires airlines to make a strong showing that the proposed alliance would generate substantial public benefits that are not otherwise possible to achieve – and that the proposed alliance is likely to do so quickly after a grant of [antitrust immunity]."

Hawaiian has ordered widebody aircraft to expand its international routes across the Pacific Ocean, including 10 Boeing 787s with an option to order an additional 10.

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