The Department of Transportation has rejected an application by Hawaiian Airlines and Japan Airlines (JAL) to operate a transpacific joint venture.

The final decision, blocking the carriers’ request for antitrust immunity, affirms the tentative rejection issued by the department in October.

Antitrust immunity would have allowed Hawaiian and JAL to jointly market, schedule and operate flights. 

In their original application, the two carriers had sought authority to jointly operate nonstop flights between Japan and Hawaii, as well as connecting flights from Hawaii, through Japan to 10 other countries in Asia.

The DOT rejected the proposal, concluding that the joint venture would not offer public benefits that carriers couldn’t offer through non-immune commercial agreements. JAL and Hawaiian are already codeshare partners. 

In response to that rejection, the carriers expanded the proposed joint venture to include nonstop flights to the 10 Asian countries beyond Japan, as well as two new countries; India and Russia. They also added Tokyo-Guam, Hawaiian routes to three South Pacific destinations, and decided to include JAL’s low-cost subsidiary ZIPAIR, which flies Honolulu-Tokyo. 

On Friday the DOT nevertheless stuck with its denial. There isn’t evidence, it said, that the new proposals would encompass service they won’t offer absent antitrust immunity. In addition, the DOT rejected arguments by the JAL and Hawaiian that because their codeshare agreement has fared poorly, their level of partnership will decrease in the absence of antitrust immunity. 

“The poor performance of the current partnership suggests implementation and strategic challenges that must be addressed before the department can determine the impact of a grant of [immunity],” wrote Joel Szabat, assistant DOT secretary of aviation and international affairs. 

In the U.S-Pacific market, JAL already operates a joint venture partnership with American for mainland service. Delta and Korean and All Nippon Airways and United also operate anti-trust immune partnerships. 

In a statement, Hawaiian said the DOT is preventing it and JAL from entering into the same type of joint venture it has already allowed for the major global alliances.

“This decision stifles competition and ultimately hurts consumers by preventing both Hawaiian and JAL from offering more choice and greater access for thousands of travelers flying each day between Japan and Hawai’i, and beyond,” the company said. “We will continue to evaluate opportunities to enrich our partnership and deliver greater value to our guests.”

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