The latest move by American Airlines and Qantas to form a trans-Pacific alliance faces delays after the US Department of Transportation issued an order requiring more information on a range of issues, including the expected benefits to travellers.
The DOT says in the June 13 request that it needs more information in order to evaluate the benefits the airlines say will flow from the deal.
The department wants to know the specific levels of service the joint business would provide and the extent to which anti-trust immunity is needed to achieve these benefits.
It also seeks clarification on how the airlines will share revenue and improve yields under the deal as well as a further explanation of expected consumer benefits and financial performance data for existing flights.
Detailed requests in a 14-page attachment suggest the airlines will be kept busy providing the additional information and that the department has no intention of proceeding until it is received.
“When the additional evidence requested has been submitted, we expect to have all the necessary elements to determine that the record is substantially complete and to establish a procedural schedule,’’ the DOT said in its order.
A Qantas spokesman said the request for additional information was part of the process and not unexpected.
“We are reviewing the DOT’s request for extra information and will work together to provide the additional detail required,” he said.
American and Qantas in February flagged a range of lower fares and discounts if the new joint venture was approved.
READ: Photo shows hail-shattered nose of American plane.
But the stick accompanying the carrot is a warning they may have to reduce some services between the US and Australasia if the bid is rejected
At risk, according to the airlines, is the Qantas Airbus A380 service between Sydney and Dallas-Fort Worth and American’s services between Los Angeles and Sydney and Auckland.
The original application foundered in 2016 when the US DoT issued the airlines with a tentative show cause order that proposed to the reject the application.
The proposed alliance had already been given a green light by regulators in Australia and New Zealand and the airlines at the time vowed to try again.
The airlines had applied to expand their joint business agreement to a full alliance similar to the one Qantas has with Gulf carrier Emirates that would allow them to operate “metal neutral’’ joint flights alongside each other.
But the DoT concluded that the proposed alliance would substantially reduce competition and consumer choice without producing counterbalancing public benefits.
In a separate development, Qantas announced Friday it would add more flights to Asia-Pacific routes.
This will see it boost its Sydney-Singapore service from 14 to 17 a week from December 14 and Sydney-Jakarta from five to six weekly flights from December 13.
It is also boosting its Sydney-Noumea service from three to four times weekly from December 12.
The airline said it was boosting the services to meet increased demand.
