Alaska May Join American & Japan Airlines Transpacific Joint Venture

Among network carriers, long haul markets tend to be dominated by joint venture agreements. With this, airlines are allowed to coordinate fares and schedules, to create as comprehensive of a network as possible. The downside is that these joint ventures are the equivalent of eliminating a competitor, since multiple airlines are essentially merging parts of their business, and acting as one.

Along those lines, there’s an interesting development when it comes to Alaska Airlines’ plans to launch long haul flights…

Alaska may join a transpacific joint venture

Alaska Air Group recently acquired Hawaiian Airlines, which has some exciting implications. It’s impressive how fast Alaska is moving with making changes. We know that Alaska plans to launch long haul flights out of Seattle, and the airline is targeting 12 long haul routes by 2030. The first route launches in May 2025, and will be to Tokyo Narita (NRT), using a Hawaiian Airbus A330.

It’s exciting to see Alaska introducing long haul service, though it can be hard to go at it alone. I’ve seen some people suggest that Alaska will hemorrhage money on long haul flights. Personally I don’t view it that way, though it does take time to scale a network.

If you ask me, Alaska’s biggest issue will be the product it offers, at least in the short term. Hawaiian’s A330s just aren’t competitive, given the 2-2-2 layout. We know that Alaska is looking at updating these cabins, but there’s no news yet as to what we’ll see, and when it’ll happen.

There is a noteworthy update when it comes to Alaska’s long haul plans, as there are reportedly discussions taking place for Alaska to join the American and Japan Airlines transpacific joint venture.

It sounds like this isn’t imminent, but rather, is a long term project. This was revealed by Japan Airlines’ Vice President of Route Marketing and Sales. Now, keep in mind that Alaska already has a partnership with American and Japan Airlines, including reciprocal opportunities to earn and redeem points, plus codeshare agreements.

However, from the perspective of airlines, there are huge advantages to belonging to a joint venture, in terms of being able to coordinate fares, schedules, etc. Airlines always prefer to book a passenger on a joint venture partner, rather than just a codeshare or interline partner.

Admittedly joint ventures are also much harder to get regulatory approval for. It’s anyone’s guess if such a deal would be approved by regulators. Personally I think there’s consumer benefit here, but really, regulatory approval all comes down to how things are framed.

The partnership dynamics at play here are interesting

There’s nothing preventing airlines from the same region from belonging to the same joint venture. However, in the United States, we’ve generally seen only one “local” carrier be part of every joint venture. That’s mostly a function of there being three airline alliances and three global US carriers.

The evolving partnership between Alaska and American has been interesting to watch. Keep in mind that initially the plan was for American to launch long haul flights out of Seattle, and for Alaska to provide the regional feed for those flights, as part of a win-win arrangement. However, that strategy collapsed for a variety of reasons, and American gave up on that. Now we’re seeing Alaska launch long haul flights out of Seattle, without any specific support from American.

Obviously Alaska joining the American and Japan Airlines transpacific joint venture would require the support of both airlines. Would American really be onboard with Alaska joining this joint venture?

The obvious argument against it is that it will dilute American’s importance in the transpacific joint venture, and the direct upside from such an agreement can be hard to quantify. At the same time, though, I see merit to it, especially considering competitive dynamics:

• American just isn’t really trying to compete across the Pacific, so competitively, it seems beneficial for American’s partners to at least have more service
• Realistically, it’s in American’s best interest for Alaska to put up a good fight against Delta in Seattle, in terms of weakening Delta’s transpacific presence, and challenging its growing West Coast hub
• American is significantly weaker than United across the Pacific, and Delta’s joint venture with Korean Air is strong

If Alaska could join this joint venture, I could see merit to the airline increasingly adding flights to Japan out of most of its hubs, ranging from Seattle (SEA), to San Francisco (SFO), to Portland (PDX), to Honolulu (HNL).

We’ll see how this plays out. I don’t imagine American is overly enthusiastic about this, since Alaska expanding across the Pacific in some ways reflects American’s own failures. But at the same time, American probably realizes it’s better off with Alaska than without Alaska, and it’s also about competing with Delta and United.

Bottom line

Discussions are reportedly taking place for Alaska to join the transpacific joint venture between American and Japan Airlines. It’s rare to see two US airlines be part of the same long haul joint venture, so this would be pretty significant, if it happens.

This would be hugely beneficial for Alaska, in building up its long haul network out of the Pacific Northwest. I think there’s consumer benefit here, and ultimately I think American is better off with Alaska than without Alaska, given the competitive dynamics.

What do you make of the prospect of Alaska joining the American & Japan Airlines joint venture?