Qantas, American remain confident on alliance bid

August 23, 2018
American flights
LA-Sydney flights suspended until May 6. Image: Qantas.

Qantas remains confident its joint venture with American Airlines will be approved but says a decision on its next US destination depends on how that pans out.

The partners are hopeful a decision from the US Department of Transport will come through in the next few months and Qantas will be able to announce which destination its Brisbane-based Boeing 787s will service.

The contenders are Chicago, Seattle and Dallas. Chicago and Dallas are hubs for American while Seattle is the home of another partner, Alaska Airlines

“We’ve made it very clear (about) our ambitions to grow our North American operations with more destinations and the 787 gives us great capability in order to do that,’’ Qantas chief executive Alan Joyce said at Thursday’s annual results announcement.

READ Qantas underlying profit hits a new record.

“We are working through the Department of Transport  application. They’ve asked us for more information, which was expected.

“We’re still confident, as America Airlines are,  that we will get the anti-trust immunity. We need that to be resolved because that does influence which of those destinations actually works.”

Joyce said the airline’s experience in Dallas had clearly shown that a partnership was needed to make these sorts of operations effective.

He said all the options remained on the table and the airline was not ruling anything in and out at this stage.

The original application by the airlines for anti-trust immunity for their trans-Pacific alliance foundered in 2016 when the DoT issued a tentative show cause notice that proposed to reject it.

The department concluded at that time that the proposal would substantially reduce competition and consumer choice without producing counterbalancing benefits.

Qantas and American regrouped to lodge a new submission in February, 2018 but in June the DoT issued an order requiring more information on a range of issues, including the expected benefits to travelers.

READ: US seeks more information on American-Qantas alliance benefits.