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American Airlines seeks Trump administration blessing for expanded Australia partnership with Qantas

Filed under American Airlines at 4 hrs ago

After striking out down under in 2016, American Airlines is making another run at partnering more closely with Australia’s Qantas Airways on flights to and from the popular tourist destination.

The Fort Worth-based carrier filed an application for antitrust immunity for the joint venture with the Department of Transportation on Monday, starting an extended review period that will take several months or more.

A previous application by American was rejected by the DOT in 2016 over concerns that a closer partnership between the largest U.S. carrier and largest Australian carrier would hurt competition and consumer choice in the U.S.-to-Australia market

The two airlines will be looking for a more favorable reception for their application from the new Trump administration, which in November approved a similar partnership between Delta and Korean Air. American first announced plans to refile its application in January 2017.

American and Qantas are seeking to expand on their existing codeshare relationship -- which allows for some cross-marketing of flights and for passengers to connect between the two airlines on a single itinerary. 

Qantas currently operates one daily flight from DFW International Airport to Sydney, Australia.

An expanded relationship would "unlock" more than $310 million in benefits to consumers in the form of improved connections, frequency of flights and lower connecting fares, American contends. 

The airlines also could jointly add new routes to other Australian cities and New Zealand, American said. The Fort Worth-based carrier estimates up to 180,000 new trips annually from the joint venture.

If approved, the antitrust-immunized joint venture would allow for American and Qantas to coordinate 

prices and schedules on flights between the U.S. and Australia, with the costs and revenues being split between the two, regardless of which carrier’s plane is used on a given route.

Without an expanded agreement, American said it fears the D-FW-to-Sydney flight might be reduced in frequency or canceled by Qantas. It cites an economic analysis that puts a $133 million annual benefit for having passengers on that route

"Critically, if the joint business is not approved, American and Qantas will have no choice but to further reduce codesharing on their networks," American's announcement said. "This will jeopardize the number of services and routes each carrier flies between the U.S. and Australia and New Zealand."

American might be forced to reduce service between Los Angeles and Sydney and Auckland, since those routes rely on codeshare support from each airline's feeder network to be "economically viable," American said.

American has similar relationships with Japan Airlines for flights to Asia and with British Airways and Iberia on certain trans-Atlantic routes.

Delta and United have antitrust-immunized joint ventures to Australia through their respective partners, Virgin Australia and Air New Zealand.

<br>(American Airlines)
(American Airlines)
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