American, Qantas Again Seeking to Form Joint Business

Sydney, Australia
Sydney, Australia // Photo by zetter/iStock/Getty Images Plus/Getty Images

American Airlines (AA) has issued a news release reporting that the carrier, along with Qantas, has filed an application with the U.S. Department of Transportation (DOT) seeking approval to form a joint business serving customers flying between North America and Australia/New Zealand.

According to Reuters, the pair’s application for a joint venture covering the United States, Australia and New Zealand was rejected in 2016 under the Obama administration amid opposition from rival carriers Hawaiian Airlines and JetBlue Airways, according to the Reuters report. 

But this time, it appears as though the pair is threatening to cut service if rejected.

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“Critically, if the joint business is not approved, American and Qantas will have no choice but to further reduce codesharing on their networks,” according to the AA release. “This will jeopardize the number of services and routes each carrier flies between the U.S. and Australia and New Zealand.”

Qantas may be forced to reduce the frequency of, downgrade or potentially cancel its A380 service between Sydney and Dallas/Fort Worth, and American may further reduce its services between Los Angeles and Sydney and Auckland, according to the AA release.

“These routes rely on codeshare support from each airline’s feeder network via their respective hub cities to be economically viable,” according to American.

According to the AA release, the proposed joint business will “significantly improve service, stimulate demand and unlock more than $300 million annually in consumer benefits that are not achievable through any other form of cooperation, including up to $221 million in value from expanding codesharing between American and Qantas – opening more connections to more destinations.”

Another consumer benefit, according to an American Airlines news release, is up to $89 million in value by offering a wider range of fare classes across each other’s networks, including lower fares and discounts. 

The joint business will also give American and Qantas the opportunity to launch additional routes between the U.S. and Australia and New Zealand, including new flights to city pairs currently not served by either carrier. All these benefits will stimulate significant demand for new travel – generating up to 180,000 new trips between the U.S. and Australia and New Zealand every year, according to the American Airlines release.

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