American and Qantas renew bid for Pacific joint venture

Oneworld carriers American Airlines and Qantas are trying for a second time to deepen their ties on flights across the Pacific, saying the move could stimulate demand for up to 180,000 new passengers.

American Airlines and Australia’s flag carrier Qantas have filed an application with US regulators for a revenue-pooling joint business agreement (JBA) that would allow them to coordinate fares and schedules.

A previous application by the two airlines for a joint venture covering the US, Australia and New Zealand was withdrawn in late 2016 amid strong objections from rivals Hawaiian Airlines and JetBlue.

However, the Oneworld members have again applied to the US Department of Transportation to create the venture - and warned that services could be cancelled if it is rejected.

The latest filing said that cooperation between airlines is “essential to provide the kind of seamless international air travel that passengers demand”.

It added the partnership would “provide passengers with seamlessly integrated, efficient service between points in American’s comprehensive US network and points in Qantas’ complementary Australasian network”.

American said its own experience of JBAs demonstrate the rationale behind the move.

In 2010 it signed a transatlantic partnership with British Airways and Iberia and, since then, the carrier claimed that the number of codeshare flights have increased five-fold to more than 6,000. In addition, 36 new transatlantic routes have been launched and capacity has increased “dramatically”.

Without the planned American and Qantas tie-up, the carriers have warned that codesharing beyond Sydney and Auckland “is at risk”.

“Qantas has in recent years allowed American to codeshare to 13 Australasian destinations beyond Sydney and eight destinations beyond Auckland,” the application said. “Without ATI [antitrust immunity] for the proposed JBA, Qantas will have significantly less incentive to allow American to codeshare to these destinations.”

It added that American allows Qantas to codeshare to 125 destinations in North America from Los Angeles, San Francisco and Dallas Fort Worth. However, if the venture is rejected American claimed it will eliminate codesharing on all 53 destinations from Los Angeles and all eight destinations from San Francisco. Codeshare connections from Dallas will be cut from 64 to 37.

The filing also warned that Qantas’ Dallas Fort Worth - Sydney service could be scrapped, resulting in the loss of “up to $133m in annual passenger value”. This is because the route relies on codesharing to be financially viable.

However, if the Trump administration approves the JBA, the Oneworld carriers said it would create hundreds of new codeshare connections, thousands of new itineraries and stimulate demand for up to 180,000 new passengers annually.

Authorities in Australia and New Zealand have previously approved the business proposal.


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