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Qantas and American Airlines to form joint business

American Airlines and Qantas have filed a new application with the US Department of Transportation (DOT) seeking approval to form a joint business to serve customers flying between North America and Australia and New Zealand.

The proposed joint business will significantly improve service, stimulate demand and unlock more than $USD 300 million annually in consumer benefits that are not achievable through any other form of cooperation, including:

  • Up to $USD 221 million in value from expanding codesharing between American and Qantas – opening more connections to more destinations.
  • Up to $USD 89 million in value by offering a wider range of fare classes across each other’s networks, including lower fares and discounts.

If successful, the airlines may launch additional routes between the US and Australia and New Zealand, including new flights to city pairs currently not served by either carrier, and expect that the benefits arising from the joint business could help to generate up to 180,000 new trips between the US and Australia and New Zealand every year.

The United States Department of Transport issued Qantas and American a tentative Show Cause Order in 2016 proposing not to grant approval for the original application. The airlines filed a new application arguing that the decision did not take into account precedent, intense competition on the Trans-Pacific route and the benefits a closer relationship between the two carries had already delivered and would deliver going forward, including new routes.

If the new application to form a joint business is not approved, the airlines expect to further reduce codesharing on their networks.