American, Qantas promise lower fares after joint venture approval
06 Juin, 2019, 06:51 | Auteur: Auguste Feret
The tie-up was granted tentative antitrust immunity by the department, paving the way for American and Qantas to coordinate fares and schedules if granted final approval, the department announced on Monday.
As part of the case put to the department of transport, Qantas and American flagged an intention to launch several new routes within the first two years of the proposed joint business.
The US Department of Transportation (DOT) has tentatively granted antitrust immunity to American Airlines (AA, Dallas/Fort Worth) and Qantas (QF, Sydney Kingsford Smith) over their proposed enhanced transpacific joint business agreement. "We're hopeful the Qantas joint business will be approved". Both companies have apparently been required by the transportation agency to provide a self-assessment report for the joint venture business, which will include a study on the impact on competition in next seven years after it is established.
American Airlines and Qantas made a second attempt, in February a year ago, to gain U.S. regulatory permission under President Donald Trump's administration for a venture that would let them coordinate prices and schedules, threatening to cancel services if it was rejected and arguing it could "unlock" up to US$310 million (S$425 million) annually in consumer benefits. The revised application reportedly made substantial changes including the elimination of a provision that would have banned either carrier from codesharing with other carriers, cited sources familiar with the matter.
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Regulators in Australia and New Zealand have already approved the plan. Expanded code-sharing will provide additional connections and improve access to seats on each airline's network, the carriers said. The airlines said the agreement could generate up to 180,000 new trips between the United States and Australia and New Zealand annually.
American Airlines said a final decision is expected in the coming weeks. Shares of American Airlines Group Inc. trade on Nasdaq under the ticker symbol AAL.
The airlines said final approval of the joint business will allow a commercial integration that would deliver new routes and significant customer benefits not possible through any other form of cooperation.
If the venture is granted final approval, the two could offer more flights, including to cities not now served by either, they said. However, given the JV would cover the ultra-long-haul US-Australasia market with unique structural and geographic factors in play, including a high concentration in certain segments of the market, there is the possibility that competition could be adversely affected if the joint venture plans are not implemented as intended. "We have a number of different, very good routes and plans for a very good expansion into the United States when it is approved", he told reporters.
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