What we’re reading: JAL joins Skyteam, Boeing considers 737 redesign, IRS says fees aren’t taxable


JAL dumps alliance with American Airlines in favor of Delta, SkyTeam

Japan Airlines has decided to leave Oneworld and its alliance with American Airlines to join with Delta and Skyteam.

American together with a private equity firm had offered to invest $1.4 billion in JAL and strengthen cooperation between the two airlines, but JAL judged an alliance with Delta — the world’s largest airline — would produce greater benefits.

The partnership with Delta will be officially announced by new JAL Chairman Kazuo Inamori on Monday.

Boeing: Re-engined 737 under ‘active consideration’; 2009 profit falls 51%

Boeing is considering redesigning the 737 after customers told the company they would like a more efficient narrowbody.

With Bombardier’s PW1000G-powered CSeries set to enter service in 2013 and engine-makers in the process of developing next-generation powerplants, McNerney said airlines are “pushing us to consider re-engining [the 737] and in some cases to build a whole new airplane.” He did not put a timeline on a decision but said the manufacturer has a “wedge” factored into its budget to enable it “to quickly move” on a re-engined 737 “as the market requires.”

IRS says airline fees for checked bags aren’t taxable

The IRS has ruled that baggage fees that the airlines charged aren’t taxable.

The decision, posted on the IRS Web site, came in a letter this month responding to a 2009 request for clarification by an unidentified commercial airline company regarding applicable taxes.

At a minimum, the decision will provide “a little extra for the airlines and it’s going to take away from the government,” said Roger Herbst, a commercial pilot and founder of Airlinefinancials.com, an Internet site that provides industry data and analysis.

(Photo: Drewski2112/Flickr Creative Commons)

  • Joel Wechsler

    Does this mean we can look forward to $300 baggage fees and $25 fares? I don’t understand how such a huge revenue/profit souce can be untaxed.

  • Joel Wechsler

    Will we now see $300 baggage fees and $25 fares? How can such a huge source of revenue/profit remain untaxed?

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