Hawaiian Airlines and JAL partnership blocked by US

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The planned partnership between Hawaiian Airlines and Japan Air Lines is seemingly dead in the water after a U.S. decision to block the proposed tie up.

The airlines had “not demonstrated how the [joint venture] would function in terms of revenue sharing, pricing and marketing,” despite previous questions raised by regulators, the Department of Transportation said on Friday. As a result, it denied Hawaiian and JAL’s request for immunity for their proposed partnership.

“This decision stifles competition and ultimately hurts consumers by preventing both Hawaiian and JAL from offering more choice and greater access… between Japan and Hawaii, and beyond,” Hawaiian spokesperson Tara Shimooka told TPG. “We will continue to evaluate opportunities to enrich our partnership and deliver greater value to our guests.”

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Hawaiian and JAL sought approval for a pact that would have allowed them to coordinate services between Hawaii and Japan, as well as into Asia. Coordination of everything from flights to fares and sales is possible with antitrust immunity from the DOT.

In October, the regulator tentatively ruled that Hawaiian and JAL could achieve the level of cooperation they proposed — including benefits to travelers — without immunity.

In response, the airlines promised to grow capacity by nearly a quarter between Hawaii and Japan, as well as provide additional connections into Asia. Their growth would include new routes between the islands and cities in Japan outside of Tokyo.

The proposed Hawaiian-JAL pact was, in part, in response to changing competitive dynamics between Hawaii and Japan. For example, All Nippon Airways (ANA) debuted Airbus A380s with 520 seats on flights between Tokyo Narita (NRT) and Honolulu (HNL) last June.