American and Qantas to form joint business; file application with the US DOT
February 27, 2018: American Airlines and Qantas have filed an application with the US Department of Transportation (DOT) seeking approval to form a joint business to better 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 $300 million annually in consumer benefits that are not achievable through any other form of cooperation, including:
Up to $221 million in value from expanding code-sharing between American and Qantas – opening more connections to more destinations. Up to $89 million in value by offering a wider range of fare classes across each other’s networks, including lower fares and discounts. The joint business will also give American and Qantas the opportunity to launch additional routes between the US and Australia and New Zealand, including new flights to city pairs currently not served by either carrier.
An expanded relationship will encourage significant improvements in the overall customer experience, including additional frequent flyer benefits and investments in lounges, baggage systems and other infrastructure designed to better serve the carriers’ joint customers. All these benefits will stimulate significant demand for new travel – generating up to 180,000 new trips between the US and Australia and New Zealand every year.
Critically, if the joint business is not approved, American and Qantas will have no choice but to further reduce code-sharing on their networks. This will jeopardize the number of services and routes each carrier flies between the US and Australia and New Zealand.
For example, Qantas may be forced to reduce the frequency of, downgauge or potentially cancel its A380 service between Sydney and Dallas/Fort Worth, and American may further reduce its services between Los Angeles and Sydney and Auckland. These routes rely on code-share support from each airline’s feeder network via their respective hub cities to be economically viable.