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New routes nearer as US smiles on Qantas-American deal

June 5, 2019 Headline News No Comments Email Email


Qantas and American Airlines have come a step closer to launching their proposed new joint Brisbane-Chicago and Brisbane-San Francisco services, following the US Department of Transportation’s tentative approval of the carriers’ proposed joint business arrangement.

Last year, American Airlines and Qantas filed a new application with the US Department of Transportation (DoT) seeking approval to form a joint business agreement between North America and Australia and New Zealand – with Qantas warning that it might cancel its A380 service between Sydney and Dallas/Fort Worth it the application didn’t get the green light.

In a ruling in late 2016, DoT had frowned on the proposal, saying it foresaw a “high risk of competitive harm” in allowing the largest US carrier and the largest Australian carrier to enter into a joint venture.

The DoT now seems to have had a change of heart.

Qantas and American say final approval of the joint business will allow for commercial integration between the two carriers, delivering new routes and significant customer benefits not possible through any other form of cooperation, including, as Qantas puts it:

  • The opportunity to launch new routes and flights to new destinations, including to city pairs not currently served by either carrier.
  • An expanded codeshare relationship and optimised schedules on trans-Pacific services, opening up more connections to more destinations and reduced total travel time.
  • Better access to seats on each carrier’s network, leading to lower fares.
  • Additional frequent flyer benefits by further integrating the carrier’s programs, including higher earn rates for points on each other’s networks beyond what is possible today through oneworld, as well as increased redemption opportunities and improved reciprocal end-to-end recognition of our top-tier frequent flyers.
  • Co-location at airports, investments in lounges, baggage systems and other infrastructure designed to better serve the carriers’ joint customers.

B787 Dreamliners in American Airlines livery

As part of the case put to the DoT, Qantas and American flagged an intention to launch several new routes within the first two years of the proposed joint business. Qantas expects to announce details of two new routes – Brisbane-Chicago and Brisbane-San Francisco – once final approval is received.

Those two routes would be of competitive concern to Air New Zealand and its US partner United Airlines. Last November Air New Zealand began non-stop B787-9 Dreamliner service, three-times weekly, between Auckland and Chicago. The new service attracts Australian travellers and has deepened the alliance between Air New Zealand and United. In April 2019, United extended its seasonal non-stop service between Auckland and San Francisco to year-round.

Commenting on the DoT tentative approval of the arrangement with Qantas, American Airlines chairman and chief executive Doug Parker, stated: “As was evident in the unprecedented level of public support for this application, the joint business will also create additional jobs at our respective companies and in the industries we serve.

“We thank Secretary Chao and the DOT for their careful consideration and look forward to final approval in the coming weeks.”

Qantas Boeing 787-9 Dreamliner.

Qantas Group chief executive, Alan Joyce, said: “Both airlines submitted a compelling proposal to the DOT that would bring significant benefits to millions of travellers and a boost to tourism.

“For more than 30 years, Qantas and American have connected the US and Australia as partners. This joint business means that we’ll be able to deepen this partnership to offer new routes, better flight connections and more frequent flyer benefits.”

Qantas and American will review the order, with a final decision from the DOT expected in the next few weeks.

Written by Peter Needham

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