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CO And UA Seek ANA Deal

CaptJax

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Continental and UAL seek ANA deal

By Justin Baer in New York

Published: October 27 2009 23:05 | Last updated: October 27 2009 23:05

Continental Airlines has joined its new ally, United Airlines, in seeking a revenue-sharing venture on key trans-Pacific routes with Japan’s All Nippon Airways.

The discussions come as US and Japanese officials work towards an Open Skies treaty that would improve access to important airports and spur closer ties between each country’s biggest carriers.

“As we look at Open Skies, we’ll look at how we can take advantage of antitrust immunity on a joint venture across the Pacific,” Larry Kellner, Continental’s chief executive, said on Tuesday during an event celebrating the Houston-based airline’s formal initiation into the Star Alliance.

Continental and fellow Star members United and ANA expect to reach an accord by the end of the year with a view to getting US regulatory approval for the venture by October 2010, according to people familiar with the matter.

That is when Tokyo’s Haneda Airport, which handles mostly domestic traffic, will open to international services. Many global carriers hope to secure take-off and landing slots at Haneda, which is nearer the city centre than Narita, the main international airport.

The extent of US carriers’ access has been a key issue in the Open Skies negotiations, which are expected to conclude by the end of the year. Keisuke Okada, an executive vice-president at ANA, told the Financial Times that he remained “hopeful” the parties would achieve that goal. Officials began another round of talks on Monday in Tokyo.

The treaty would mark the first step to “immunised” trans-Pacific partnerships, similar to those US airlines have formed across the Atlantic with European carriers, such as Lufthansa and Air France-KLM.

Immunity from US antitrust laws frees airline partners to share revenue and costs, and co-ordinate schedules, fares and corporate sales pitches.

Continental agreed to join Star and seek an immunised trans-Atlantic venture with United and Lufthansa last year after two of its former allies, Delta Air Lines and Northwest Airlines, agreed to merge.

For many flagship carriers, which have been hit by low-cost rivals on domestic routes and restricted from full-blown mergers with foreign peers, immunised ventures have emerged as their best hope for finding sustainable stability. As partnerships evolve, airlines may reap billions of dollars in revenue and find billions in cost savings.

Immunised aviation ventures have drawn scrutiny from regulators and politicians are concerned the partnerships will squeeze out independent competitors and lift ticket prices.

Mindful of the competitive threat a United, ANA and Continental venture would pose, rivals Delta and American Airlines are vying with one another for a partnership with Japan Airlines.
 

St. Nic

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When are CAL/ UAL going to announce their merger?
 

Fubijaakr

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I'll bet its just after the holiday rush is over.
 
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