TOKYO -- Japan Airlines has been forced to reevaluate its joint venture with Hawaiian Airlines after the U.S. Department of Transportation declined to grant them antitrust immunity.
The airlines announced their partnership back in September 2017, and have been operating code share flights between Japan and Hawaii since March 2018. To further expand their tie-up, they had applied for antitrust immunity in both Japan and the U.S. in June 2018.
But on Thursday, the U.S. Transportation Department decided that the public would not benefit enough from the joint venture to warrant antitrust immunity, which the airlines need to coordinate fares and schedules.
The companies can submit an appeal within two weeks. The decision otherwise will be finalized at the end of that period.
In the aviation industry, a joint venture refers to a partnership that allows airlines to jointly schedule flights and manage earnings. For customers, this means easier connections.
The department's decision is "disappointing for both sides," JAL said in a statement. "Since this is a provisional view, we will continue to discuss all possibilities with Hawaiian Airlines to further improve customer convenience."
The lucrative Japan-Hawaii route is a strategic focal point for JAL's rival All Nippon Airways as well, with the latter deploying the supersized Airbus A380 from May this year, adding dozens of extra seats.
The alliance with Hawaiian Airlines had been a pillar of JAL's Hawaii strategy and the loss will be a major blow if the department's decision becomes final.