Japan to favour ANA in Haneda allocation with over half of slots -sources

Reuters

TOKYO, Oct 1 (Reuters) - Japan's government plans to awardANA Holdings, the nation's biggest carrier, more thanhalf of 20 new international arrival and departure slots atTokyo's Haneda Airport, more than twice what it will give torival Japan Airlines, two sources with knowledge of thedecision said on Tuesday.

The allocation, which could be announced as early asWednesday, concludes a politically charged battle over landingrights that has threatened to embroil foreign carriers.

The slots, which airlines normally retain as long as theystay in business, can be worth around $20 million a year each inoperating profit, industry analysts have told Reuters. ANAlobbied hard for a big share of the landing rights, arguing thatit had been put at a competitive disadvantage by JAL's $3.5billion taxpayer funded bailout in 2010.

Prime Minister Shinzo Abe's government, which was inopposition when JAL was rescued, has proved sympathetic to ANA'scall for a rebalance. Although the latest allocation falls shortof ANA's demand for all the new slots, it represents a blow toJAL.

ANA will receive 11 slots against five for JAL, the sourcestold Reuters on condition they weren't identified. Thedistribution of a further four slots designated for routes toand from the United States will be decided after Japan concludesbilateral negotiations with the U.S. government, they added.

Such allocations are normally split down the middle by civilaviation officials, but the latest allocation was insteaddecided with heavy involvement from the Prime Minister's office,industry sources have said.

As JAL is a member of the OneWorld carrier alliance, fellowmembers including British Airways and American Airlinesvoiced concern that a decision favouring ANA at Haneda, theworld's fourth-busiest airport, would hurt their grouping bygiving ANA and thus its fellow Star Alliance members an edge atthe hub.

With no new runways or airports planned for Japan's capital,any such disadvantage for JAL and its partners could be lockedin for years.

JAL, once Asia's biggest carrier, has argued that anycompetition issues should be settled through other means thanslot allocations. ANA insisted that a bankruptcy process thatwiped out most of JAL's debt while allowing it to keep taxcredits needed to be addressed urgently.

In the quarter to June 30, JAL made an operating profit of22 billion yen ($224.20 million), while ANA posted a 5.6 billionyen operating loss.

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