Qantas, American Looking to Deepen Alliance to Compete for US-Oceania Routes

17th Jun 2015

Oneworld alliance members Qantas and American Airlines have said today they have proposed to expand their current alliance so they could successfully compete with other carriers flying between US and Oceania.

In addition to that, the two carriers also believe this alliance would benefit customers.

Metal-Neutral Alliance Structure

The application would replace the current JBA (joint business agreement) and bring a new alliance. This new alliance would have a "fully metal-neutral alliance structure", as well as a revenue sharing agreement.

The Australian and American airlines have filed their applications for anti-trust immunity with the Australian Competition and Consumer Commission and the US Department of Transportation.

Alliance Will Serve to Increase Competition, Says American Airlines

Here's what American Airlines said about this alliance:

"The proposed alliance will do even more than the Original JBA, further increasing capacity, reducing travel times, generally improving the customer experience, and increasing competition."

They also added:

"The proposed alliance will allow American and Qantas to compete and effectively with the immunized Delta (SkyTeam)-Virgin Australia and United-Air New Zealand (Star) alliances, and provide a range of public benefits without substantially reducing competition in any relevant market. The proposed alliance promotes, and is no way adverse to the public interest."

The two carriers are looking to operate 45 flights between them every week between Australia and US. The will fly between Sydney, Melbourne and Brisbane on one side, to Los Angeles, San Francisco and Dallas on the other. In addition, Qantas will also fly to Honolulu, and between LA and NY.

Neither Company Able to Fly Trans-Pacific on Its Own

According to Qantas, neither it, nor their partners are capable of flying trans-Pacific routes on their own due to the high traffic beyond the gateway cities. From its submission it can be seen about 52 per cent of passengers on Qantas Australia-US mainland flights were headed to some other destination other than LA and Dallas.

The Australian carrier said:

"The success of Qantas' trans-Pacific services remains dependent on accessing the breadth, depth and efficiency of the American network and sales and distribution channels in the US, Canada and Mexico. The success of American's new service will similarly be dependent on utilizing Qantas' Australian sales and distribution channels and domestic network.

A few days ago American has announced that it will begin operating Sydney-LA route starting 17th December. This will be a daily service and the US carrier will use Boeing 777-300ER planes on it.

Qantas, on the other side, has revealed their plans to return to San Francisco for the first time since they dropped the service in 2011 in favor of Dallas-Fort Worth.