After nearly five years of trying, American Airlines and
Qantas have received tentative approval from the U.S. Department of
Transportation for a joint venture between the U.S. and Australia/New Zealand
carriers.
The longtime partners first filed for the JV, which will
enable revenue sharing and coordinating pricing and schedules, in 2015, but the
DOT rejected
the application in 2016, saying the scale of the joint business could
create "a potentially uncompetitive environment." The carrier refiled
in 2018, and the DOT in its recent tentative approval said, "Market
conditions have evolved since 2016 to mitigate any competitive harm that an
American/Qantas joint venture could cause."
For one, the DOT noted, "the market has grown
substantially" since the previous application, including new service from
United, Air Canada, Virgin Australia and Air New Zealand.
The tentative approval includes a requirement that both
American and Qantas give an annual progress report and a more detailed
assessment after seven years, including on pledges to increase service between
the two regions. American and Qantas will launch "several new routes
within the first two years of the proposed joint business," including two
new Qantas routes—Brisbane to both Chicago and San Francisco—once the JV gets
final approval, according to American. Other plans include deeper integration
of frequent-flier programs, airport co-location and investing in lounges that
serve joint business customers.
Both of American's chief competitors already have JVs in the
region: Delta with Virgin Australia and United with Air New Zealand.
Over the next few weeks, prior to issuing its final
decision, the DOT will accept commentary on the tentative decision.