The airlines have filed a new application to form a joint business, which requires the approval of the US Department of Transportation. A previous attempt in 2016 was denied after concerns were raised by competing airlines. However, the companies say this would improve their service and stimulate demand by creating the opportunity to launch more routes between the countries and introduce flights between cities that are currently not served by either carrier. It will also allow them to offer a wider range of fares, which will include lower fares and discounts, according to a joint statement.
Airlines rely on code agreements – where multiple airlines sell tickets on the same flight – to make certain routes economically viable. Now, Qantas and American are warning that should the proposal not be approved, the airlines “will have no choice but to further reduce codesharing on their networks. This will jeopardize the number of services and routes each carrier flies between the U.S. and Australia and New Zealand.” Qantas argues that without the deal it may have to reduce the frequency of, or potentially cancel, its A380 flight between Sydney and Dallas/Fort Worth. American Airlines says it may have to further reduce the number of flights from LA to Sydney and Auckland.
However, should the new joint venture gain approval from the US government, the airlines say their expanded relationship will benefit their passengers. It could also generate up to 180,000 new trips between the US and Australia and New Zealand each year.