Oneworld alliance recruits Japan Airlines

Oneworld, the international airlines alliance led by British Airways and American Airlines, formally admitted Japan Airlines, Asia's biggest carrier, yesterday. The move boosted its share of the global air transport market to almost 20 per cent.

Japan Airlines, which first announced it had begun talks with Oneworld in October last year, will now be fully integrated into the network by early 2007, along with five smaller airlines owned by the Tokyo-based carrier.

The deal represents a coup for Oneworld, because the Japanese airline is the largest in the world not currently attached to an alliance. Its leading domestic competitor, All Nippon Airways, is a member of the rival Star Alliance.

The agreement will add 47 additional destinations to Oneworld's network, boosting passenger capacity by about a fifth to 320 million passengers a year.

Yesterday's agreement followed the announcement last week that Aer Lingus is to quit Oneworld next year. The Irish airline, which has recently shifted its focus away from long-haul travel towards budget fares, said it no longer needed to be part of a global alliance. In addition to BA and American, Oneworld's other members are Cathay Pacific, Finnair, Iberia, Lan Chile and Qantas. The alliance is also in the process of accepting two additional members, Royal Jordanian and Malev, the Hungarian carrier.

Oneworld earned its members combined revenues of $650m (£345m) in 2005, a 20 per cent increase on the previous year, the alliance revealed yesterday. Almost two-thirds of this revenue was money that member airlines would not have earned without the alliance, Oneworld said. Also, "interlining", in which an airline sells tickets on another alliance member's flights, generated $1.8bn for the eight carriers in 2005, a 10.7 per cent increase on the previous year.

John McCulloch, Oneworld's managing partner, said deals between airlines represented their best hope of coping with mounting competition and record fuel prices. "In a business where operating margins are generally wafer thin, revenues from Oneworld represent an increasingly important contribution to our members' financial standings," he said.

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