Into the World's Skies — Globalization and Alliances

Before the two companies that had been competing on domestic routes, a new horizon eventually opened. It was the arrival of an era in which a single nation’s airline could no longer realistically spread routes across the entire world on its own.

Passengers want to be carried smoothly from Tokyo to the far side of the globe on a single ticket. Yet for one company to fly to every corner of the world, the aircraft, the crews, and the airport slots all fall far short. So the airlines chose a path of joining hands across borders. Several companies form a loose coalition, sharing their route networks and services with one another — this is what is called an ‘alliance.’ Japan’s two carriers, too, placed themselves in different camps as they set out into the world’s skies.

A Single Ticket Circling the Globe

The technology at the core of an alliance is a mechanism called codesharing.

For example, a single flight operated by one company can also carry the flight number of a partner company. From the passenger’s point of view, it can be booked as though it were the airline’s own flight, while the actual aircraft belongs to the partner. This made it possible to offer service even to cities the airline did not fly to, as if they were part of its own route network.

Alliances also advance mutual use of mileage, shared lounges for premium members, and simplified connection procedures. As the networks of member companies were bundled together, a journey circling the world on a single ticket grew much closer at hand.

ANA, Joining a Global Coalition

The first to dive into a global coalition was ANA (All Nippon Airways).

In 1999, ANA joined Star Alliance, at whose core were Germany’s Lufthansa and America’s United, among others. Star Alliance is regarded as the world’s first full-fledged alliance, founded in 1997, and ANA became one of the companies to sign on relatively early.

For ANA, which had long built up its strength on domestic routes, this was a foothold for standing shoulder to shoulder with the world’s major carriers on the new stage of international service. While its own network centered on Asia, connecting with the vast networks of its partners in Europe and the Americas linked ANA’s passengers to destinations around the world. A company that had secured its footing at home as a latecomer challenger now sought to raise its presence in international service as a member of a global coalition.

JAL, Into Oneworld

JAL (Japan Airlines), on the other hand, formally joined an international coalition later than ANA, in 2007. The camp JAL chose was Oneworld, anchored by America’s American Airlines and Britain’s British Airways.

For JAL, which had long borne international routes alone as the national flag carrier, the choice to place itself deeply within a particular camp reflected the changing of the times. Where once its own route network had itself been a symbol of Japan’s wings, in the midst of global competition, survival had grown difficult without borrowing the strength of a coalition. And so Japan’s two major airlines came to stand in the world’s skies divided into separate camps.

What is intriguing is that, with the two companies divided into different camps, a structure emerged in which Japanese rivals competed indirectly even in the world’s skies. Behind ANA lay the vast web of Star Alliance, and behind JAL lay the web of Oneworld. Even on the same route, which camp offered more convenient connections became a deciding factor. The rivalry of the two giants that had continued at home now changed form into a competition between global-scale networks.

Open Skies — The Sky’s Borders Lower

Behind the spread of alliances lay changes in agreements between nations as well. This is the current known as ‘open skies.’

In the past, international routes were finely defined by bilateral agreements — the number of flights and the cities served — with governments holding the reins over which company could fly how much. Open skies is the idea of greatly easing such constraints and leaving routes and flight numbers, as far as possible, to the airlines’ own judgment. Japan, too, is reported to have advanced liberalization with the United States and other nations from around 2010.

As the wall in the sky called borders grew lower, the value of alliances rose all the more. Partner companies also began moving into ‘joint ventures,’ operating fares and schedules as one on particular routes. Following the progress of open skies, JAL announced that it had received approval exempting its Pacific routes with American Airlines from antitrust law. That the authorities of each nation granted such cooperation as an exception shows that the very nature of cross-border competition was changing.

And so, from the 1990s into the 2000s, Japan’s two companies placed themselves in separate global coalitions, trying to survive the age of codeshares and open skies. A story that began with domestic division of territory had now shifted its stage to a network strategy on a global scale.

In the world’s skies, both ANA and JAL appeared to be steadily expanding their presence, each backed by the strength of its own camp. JAL in particular held both a history as the national flag carrier and a powerful coalition in Oneworld. Surely everyone believed that its wings would continue, unchanged, to reign over Japan’s skies.

Yet beneath their feet, another reality was quietly advancing. Behind the brilliance of global strategy, a heavy burden had piled up — and in 2010, the national flag carrier falls.