Qantas and American Give Up on Extended Alliance
30th Nov 2016
Qantas and American Airlines have canceled their plan to expand the alliance they have on each other's routes between Australia and the US following the Department of Transportation's decision not to grant them permission for it.
The two carriers had their application denied on 18th November, because, as DoT put it, this:
"Would create a potentially anticompetitive environment, given the scale of the resulting joint business, which would account for approximately 60% of the seats between the US and Australia."
The airlines were also given a deadline until 2nd December, 2016 to object to DoT's decision. They did request an extension to that deadline, but it was denied.
Back in 2011, DoT granted antitrust immunity for an alliance between Qantas and AA, but at this time American offered no services to Australia and they had no overlapping non-stop routes on the trans-pacific.
Commenting on the DoT's decision, Qantas spokesperson said both the Flying Kangaroo and its partner decided to withdraw their application.
"Given that approval has been in place since 2011, this is an extremely disappointing sequence of events for Qantas and American, as well as for customers, and ultimately for trade between the United States and Australia. It follows approval from Australian and New Zealand regulators on the basis that our expanded partnership involved no detriment and would deliver significant benefits for consumers."
According to AA, the 14-day window DoT gave American and Qantas was not sufficient time for a response. The airline also objected that the ruling was "a significant departure from prior DoT decisions", pointing to alliances between Virgin Australia and Delta Airlines as well as between Air New Zealand and United Airlines.
American Airlines said:
"Other airlines have the significant competitive advantage of antitrust immunity in the U.S.-Australasia market. With the same opportunity, American and Qantas would have been able to compete more effectively and increase consumer benefits in the market."
Qantas Freight Gets Tasmania Milk Run Contract
Meanwhile, Qantas Freight secured an exclusive and potentially lucrative contract from VAN Dairy to transport fresh milk from Tasmania to China for this company from Hobart Airport.
Qantas Freight will use Boeing 767-300 aircraft, which it had wet-leased from Express Freighters Australia to transport 50,000 liters of milk on each flight.
Sean Shwe, Managing Director of Moon Lake, parent company of VAN Dairy, said:
"There is a huge demand for fresh milk in China and the key to satisfying that demand is having a reliable freight partner with an established freighter network, infrastructure and support in China and expertise in handling fresh produce ? Qantas provides that."