American and Qantas get final nod on joint venture

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July 20, 2019
American Qantas alliance
Qantas-American alliance delivers better frequent flyer benefits.

American Airlines and Qantas say they will be able to jointly offer more products and lower fares after getting the final nod from the US Department of Transportation to more closely link their operations.

The joint venture on flights between the United States, Australia and New Zealand has been a long-standing objective of the partners but suffered a setback when it was initially rejected by the DoT.

The change in administration with the election of US President Donald Trump prompted the partners to renew their application, this time successfully.

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In a tentative determination delivered in June, the DoT found that substantial public benefits “are likely to result from the proposed immunized cooperation and that the benefits can only be achieved with a grant of antitrust immunity”.

It said the benefits were likely to include additional seat capacity and the retention and expansion of current flights and codeshares, schedule optimization, the elimination of mark-ups and technological investments that would increase seat availability.

The department proposed that American and Qantas report annually on the progress of their commercial cooperation and provide a detailed assessment after seven years.

Qantas said Saturday the final approval meant the two airlines could now coordinate as part of a joint business to deliver new routes, more destinations, reduced travel time, lower fares, and additional benefits for frequent flyers.

“The joint business will allow Qantas and American Airlines to further deepen our longstanding partnership with the first order of business for Qantas to introduce two new routes from Brisbane to Chicago and San Francisco,” the Australian airline said in a statement.

“Announced in Brisbane last month, these two new routes, which will be operated by Qantas’ Boeing 787-9 Dreamliner aircraft, are expected to launch by the end of April 2020 and will add more than 170,000 seats across the Pacific each year.

“The schedule for Qantas’ Brisbane-Chicago and Brisbane-San Francisco flights is being finalized, with fares available for sale soon.

“Qantas and American Airlines will also add codeshare services to more of each other’s existing international flights between Australia and the United States with customers able to purchase these codeshare flights in coming days.”

American chief executive Doug Parker said the US carrier looked forward to working closely with Qantas.

“We now have the opportunity to launch new routes and provide enhanced service with better schedules, additional frequent flyer benefits and continued investments in the overall customer experience,” he said.

The airlines have long been codeshare partners and are members of the oneworld global alliance but the new partnership will allow a new level of commercial integration not possible through any other form of cooperation.

As well as new flights and destinations, this is expected to include better access to seats on each other’s network, optimized schedules on trans-Pacific service, more connections and reduced total travel time.

Frequent flyers would also benefit through higher earn rates for points on each other’s networks, 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 are also on the cards.