Qantas and American Want to Expand Partnership

Eager to serve a strong, growing market, Qantas and American Airlines are seeking regulatory approval for a joint business agreement (JBA) on their services between Australia/New Zealand and the U.S. within the these regions and beyond to other countries. Both airlines are Oneworld alliance partners.

If approved, the new JBA will create a new strategic partnership between Qantas and American involving close commercial cooperation and resulting in significant benefits for consumers. It will also enable the airlines to maximize the advantages of Qantas' new service to American's primary hub, Dallas/Fort Worth (DFW), which commences next week, the airlines said.

Qantas has filed an application for authorization of the JBA with the Australian Competition and Consumer Commission (ACCC) and will file an application with the New Zealand Minister of Transport. The U.S. Department of Transportation will also review the agreement.

The key elements of the JBA are:

• Joint strategic planning and management of trans-Pacific services and 'behind and beyond' services within Australia/New Zealand and North America.

• Improvement of flight schedules, frequencies and connection times to benefit Qantas and American customers.

• Joint pricing initiatives resulting in more competitive fares and new fare products, as well as joint marketing of services.

• Increased opportunities for customers of each airline to earn and redeem frequent flyer miles/points on services operated by the other.

• A streamlined offering for corporate customers and for travel agents.

• The ability to coordinate pricing for the sale of Australia and New Zealand package destinations by AA Vacations, American's outlet for discount vacation packages.

Qantas currently offers 41 scheduled roundtrip flights per week between Australia/New Zealand and the U.S. These include 33 weekly flights to Los Angeles, four weekly flights to Honolulu and, beginning May 16, four weekly flights to Dallas/Fort Worth. Qantas also offers six weekly flights to New York via Los Angeles.

Los Angeles is a cornerstone airport for American, where it, and its affiliate American Eagle, currently operate a total of 1,010 weekly flights to 37 destinations in North America. American has announced its intention to enhance its operations at its cornerstone, and the ability to coordinate with Qantas would allow American to expand its operations at Los Angeles to other destinations given the benefit of network flow.

In March 2011, Qantas and American announced a major expansion of codesharing, increasing the number of American-operated destinations Qantas offers beyond DFW to 54. American will begin codesharing on Qantas' DFW services beginning May 16 and has already placed its code on Qantas services between Brisbane and Adelaide, Canberra, Cairns, Melbourne and Perth.

Qantas said it expects the approval process with the ACCC to take about six months.

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