Qantas, American Airlines file application to form joint business

    American Airlines and Qantas filed (27-Feb-2018) a new application with the US DoT seeking approval to form a joint business between North America and Australia and New Zealand. The airlines stated the proposed joint business will unlock more than USD300 million annually in consumer benefits that are not achievable through any other form of cooperation, including:

    • Up to USD221 million in value from expanding codesharing between American and Qantas;
    • Up to USD89 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 US and Australia and New Zealand, including new services to city pairs currently not served by either carrier. The airlines also estimated that the agreement would stimulate “significant demand for new travel”, generating up to 180,000 new trips between the US and Australia and New Zealand p/a. The airlines added: “Critically, if the joint business is not approved, American and Qantas will have no choice but to further reduce codesharing on their networks. This will jeopardise the number of services and routes each carrier flies between the US and Australia and New Zealand”. For example, Qantas stated it “may be forced” to reduce frequency of, downgauge 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. These routes rely on codeshare support from each airline’s feeder network via their respective hub cities to be economically viable, the airlines noted. [more – original PR] [more – original PR – Filing]