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JAL gives in; joins the Oneworld air alliance

Date Posted: 2007-05-02

Japan’s national air carrier, bowed to sagging profits and rising fuel costs, is teaming with an international air alliance.

Full membership in Oneworld Alliance was awarded Japan Air Lines this month, clearing the way for JAL to benefit from the now 10-airline group with its 9,200 daily flights around the world. Oneworld Alliance, which include American Airlines, British Airways, Royal Jordanian and Malev Hungarian, serves nearly 700 airports in 142 countries with its united fleet of nearly 2,400 aircraft.

Travelers will benefit greatly by the new alliance, which will reduce layover times and improve connections through the airlines’ code-sharing agreements. German carrier Lufthansa and America’s United Airlines began the alliance concept in 1997 as Star Alliance. Oneworld followed two years later, after which Northwest, KLM and Air France teamed up with other airlines to create SkyTeam.

All Nippon Airways, JAL’s principal competitor, which became a Star Alliance member eight years ago, reports the deal boosted its revenues by some ¥15 billion in the first six years. A senior Japan Air Line official predicts the same will happen with its operations. “We expect to post at least ¥3 billion in increased revenues during our first year,” he said, noting that as a stand-alone airline JAL only was able to serve 24 countries. The Oneworld linkup will cut fuel costs, as the alliance jointly negotiates the price paid by all member airlines.

International travelers will see ticket prices plummet through the alliance deal, notes an industry travel expert. Instead of having to pay individual prices with numerous airlines on an overseas trip, the consortium arrangement smoothes the way for price cuts as much as 50%.

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