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Qantas, American refiles for antitrust immunity for joint business agreement

Qantas and American Airlines have filed once again to the United States Department of Transportation (DOT) for antitrust immunity for their augmented transpacific joint business agreement.

The US regulator rejected the first application, which was filed in 2016, on the basis that the proposed metal-neutral revenue-sharing venture would bring down competition, thus also reducing choices for consumers.

In their modified submission, the scope of which covers routes between North America, including the US mainland, the US Caribbean territories (Puerto Rico and the US Virgin Islands), Canada, Mexico, and Australasia (limited to Australia and New Zealand), the two Oneworld carriers said the proposed business would substantially raise the level of service, spark demand and open up more than $300 million each year in consumer benefits that is not remotely possibly through any other form of cooperation.

Of this $300 million, up to $221 million in value would come as a result of the expansion of codesharing between American and Qantas.

This would open up more connections to more destinations, while a further $89 million in value would come through the offering of a broader range of fare classes across each other’s networks.

The joint business would also provide American and Qantas the chance to launch more routes between the US and Australia and New Zealand. This may include new flights to city pairs that are not currently serviced by either carrier.

They content that an expanded connection would compel crucial improvements in overall customer experience, including better frequent flyer perks and investments in lounges, baggage systems and other infrastructure made to better serve customers.

But should the JBA be stifled again, Qantas and American cautioned they would be left with other choice but to reduce codesharing across their networks. This in turn, would compromise the number of services and routes each carrier flies between the US and Australia and New Zealand.

Among those that might be placed at risk are Qantas’s 13 Australasian destinations beyond Sydney Kingsford Smith and eight destinations beyond Auckland Int’l that American at the moment codeshares on.

On the side of American, it would jettison codesharing on all 53 destinations from Los Angeles Int’l and all eight destinations from San Francisco, CA while axing over half the codeshare connections from Dallas/Fort Worth (37 of 64).

Should this happen, Qantas may then be compelled to lessen the frequency of, down gauge or even potentially cancel altogether its A380-800 services between Sydney and Dallas/Fort Worth, and American may further diminish its services between Los Angeles and Sydney and Auckland.

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