Pact would ease flight limits between U.S. and Japan

An aviation agreement between the United States and Japan could bring closer alliances among the major carriers in both countries.

United Airlines immediately declared it would seek antitrust immunity for a joint venture with Continental Airlines Inc. and Japan's All Nippon Airways in which the three would work together to set prices and flight schedules on transpacific routes.

But the real drama concerns the next deal. Japan Airlines, that country's largest carrier, is likely to seek antitrust immunity with Delta Air Lines Inc. or American Airlines, the two largest U.S. carriers.

Delta and American are already waging an unusually public fight over Japan Airlines. After Delta pledged $1 billion to prop up financially troubled JAL, American and its partners said they would invest $1.1 billion. The U.S. carriers are attracted by JAL's strong routes in Japan and China.

The deal reached late Friday by the United States and Japan was worked out during an intense round of talks last week. It still needs approval from both nations.

The agreement would relax limits on passenger and cargo flights between the two countries. Transportation Secretary Ray LaHood called it "good news for air travelers and businesses on both sides of the Pacific."

"Once this agreement takes effect, American and Japanese consumers, airlines, and economies will enjoy the benefits of competitive pricing and more convenient service," LaHood said.

Japanese Transport Minister Seiji Maehara welcomed the agreement, calling it "extremely meaningful," as air traffic to and from the United States provides Japan's biggest aviation market.

"I hope Japanese and U.S. aviation industries would actively take advantage of the scheme to provide better service and benefits for passengers and shippers and help promote further development of Japan-U.S. aviation ties," Maehara said in a statement.

The United States already has so-called open-skies treaties with about 90 countries, including European Union members and Australia. The agreements are designed to increase competition and cut fares by giving airlines more power to pick routes and set prices.

The U.S.-Japan agreement would give American carriers the chance to expand at Narita Airport outside Tokyo and compete at Haneda Airport near downtown Tokyo, according to the Transportation Department. The deal would replace a 1950s treaty that gives Delta and United more access to Japan than other U.S. carriers.

Will Ris, an American Airlines vice president, said open-skies agreements "end discriminatory aviation policies and are in the best interest of American and Japanese people as well as the nations' airlines."