Economy

American Airlines seeks Trump administration blessing for expanded Australia partnership with Qantas

Qantas may be forced to reduce frequency on or even axe altogether is Airbus A380 service between Sydney and Dallas/Fort Worth if its joint-business application with fellow Oneworld carrier American Airlines does not get the necessary approval, according to the airlines' new application to the US Department of Transportation (DoT).

Qantas and American Airlines are trying again for approval for a joint venture which they say will lead to cheaper flights across the Pacific, benefiting all passengers, including New Zealanders.

American Airlines Group Inc (AAL.O) and Qantas Airways Ltd (QAN.AX) are making a second attempt at gaining US regulatory permission for a venture that would allow them to coordinate prices and schedules, threatening to cancel services if they are rejected.

Codeshare flights along with the number of available fare classes on flights between Australasia and the U.S. likely would increase, and travellers could also expect wider frequent-flyer perks as well as benefit from broader investments in the airlines' lounges.

The department analyzed traffic data, passenger bookings, and other evidence submitted to reach its conclusion the alliance create a potentially anti-competitive environment with the two airlines accounting for 60 per cent of seats between the two countries.

"In fact Air New Zealand now flies the equivalent of a 777-worth of passengers a day from Australia to North America which is significantly more than the number American flies between Australia and North America".

The two airlines add that the joint venture could also result in $310 million of "quality of service benefits" such as improved connections as well as lower fares.

The new application comes as Qantas is looking at more direct services to U.S. cities using its Boeing 787-9 Dreamliners.

"American has been forced to downgrade its service to Australia and New Zealand, and the parties have stopped codesharing on flights between the United States and Sydney", say the airlines in its DOT filing. All these benefits will stimulate significant demand for new travel - generating up to 180,000 new trips between the United States and Australia and New Zealand every year.

Rejection could mean the end of Qantas's marathon 17-hour Sydney-Dallas service, which requires a codeshare arrangement with American to be financially viable, the Australian carrier said in a statement Tuesday.

American Airlines might also further reduce its services between Los Angeles and Sydney and Auckland.



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