The U.S. and Japan reached a landmark agreement Friday to relax limits on flights between the two countries, opening up the possibility of broader cross-border airline alliances and more options for air travellers.

Under the agreement, which still must be finalized by both governments, airlines from both countries would be allowed to select routes and destinations based on consumer demand for both passenger and cargo services without limitations on the number of U.S. or Japanese carriers that can fly between the two countries or the number of flights they can operate.

It would remove restrictions on capacity and pricing, and provide unlimited opportunities for co-operative marketing arrangements between U.S. and Japanese carriers.

The agreement likely will prompt Japan Airlines and All Nippon Airways to seek joint ventures with U.S. airlines.

The agreement also would provide opportunities for growth of U.S. carrier operations at Narita Airport near Tokyo and ensure fair competition regarding the new opportunities at Tokyo's Haneda Airport, which is close to the city centre, according to a statement from the U.S. Department of Transportation.

American Airlines currently has a codesharing agreement with Japan Airlines, while United Airlines has a codesharing agreement with All Nippon Airways. Delta Air Lines is seeking to lure Japan Airlines away from American and into Delta's SkyTeam alliance.

A joint venture allows airlines to share cost and revenue on certain flights regardless of which airline owns or flies the aircraft. It differs from a simple codesharing agreement in which one airline bears all the cost but another airline might get a share of the revenue for booking a customer on a flight.

The DOT said the text of the so-called open skies agreement between the U.S. and Japan has been set, although there is no specific timetable on when the agreement will take effect.

The U.S. has open skies agreements with other countries, including the European Union and Australia.


Koenig reported from Dallas. Weber reported from Atlanta.