US gives limited approval to Hawaiian-Japan Airlines venture

The Trump administration rejected a bid by Hawaiian Airlines and Japan Airlines for antitrust immunity to let them expand a partnership.

Transportation Department's disappointing decisions 

The Transportation Department said Thursday it plans to let the airlines sell each other’s flights and coordinate marketing and frequent-flyer programs for service between Hawaii and Japan, but without antitrust immunity, they won’t be able to coordinate prices and schedules. Hawaiian Airlines said it was disappointed by the decision.

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“The tentative decision recognizes the consumer benefits of our joint venture, but it overlooks the importance of antitrust immunity that major global airline alliances already enjoy, harming a small U.S. carrier like Hawaiian by preventing it from being able to compete on equal footing” with rivals, the airline said.

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 Antitrust immunity

American, Delta, and United have antitrust immunity for partnerships with foreign carriers. Hawaiian indicated that it would dispute the decision during a 14-day comment period. The Transportation Department said the airlines could get the same benefits from working together without antitrust immunity. Consumer advocates contend that antitrust immunity for airlines inhibits competition and leads to higher fares.

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If the department’s ruling is made final, the airlines could cross-sell flights and cooperate in marketing programs for routes between Japan and Hawaii and from Hawaii to 10 other Asian countries, including China and South Korea, if passengers stop in Japan on the way. The deal does not cover flights to or from the U.S. mainland.

Shares of parent Hawaiian Holdings Inc. fell 60 cents, or 2.3%, to close at $25.53.

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