Air NZ battles Qantas & AA venture

Air New Zealand is fighting to delay Qantas Airways and American Airlines from taking off this December.

Air New Zealand has taken to the Australian Competition and Consumer Commission to bar Qantas and American Airlines from flying the trans-pacific route beyond its slated peak season start in December, SMH reports.

Despite QF and AA not yet selling flights for the new services until having received approvals for an expanded alliance, but per the report, Air NZ told the ACCC there was “no compelling reason” why the airlines should then be allowed commence flights during peak season travel in December, as they could do so through other means including code-sharing or wet-leasing under existing alliance approvals that are valid till June.

“As the ACCC notes in its own guidance, a relevant factor in granting interim authorisation is whether an application could have been lodged sufficiently early to have made the request for interim authorisation unnecessary,” Air NZ said, smh reports.

“While any delay to full co-operation between the parties may result in a less than optimal launch of these services from the parties’s perspective, this delay has only been caused by the parties themselves not allowing sufficient time for the authorisation process.”

Air NZ also argued that both Qantas and American Airlines had not provided “compelling evidence” that the expanded alliance would not negate competition, according to the paper, particularly in the case of co-operation on the Sydney-Dallas route which was currently not operated by any other airline.

In response, Qantas and American told the ACCC they believed Air NZ’s arguments were invalid, the report stated.

“Air NZ’s stated concerns must be viewed in the context of the strategic advantage it would enjoy from delaying or diluting the success of the introduction of the applicant’s new joint services,” the partners said, smh reports.

“It would not be commercially feasible to launch these new services separately to the existing co-ordination, as Air NZ suggests.”

The airlines argue that peak demand in December made it the optimal time to launch and was also when the Boeing 777-300ER to be used by American on the Sydney-Los Angeles route would become available.

“Launching at this time will mean that the applicants can capitalise on capturing increased traffic flows around this time of year, while also minimising the financial losses that would result from having available aircraft underutilised or idle,” Qantas and American said, smh reports.

“Air New Zealand would be a major beneficiary of any delay or dilution of success of the new services.”

Meanwhile, other associations including Tourism Australia, Brisbane Airport, Sydney Airport and the Department of Infrastructure and Regional Development – all looking to gain from the deeper alliance between Qantas and American – expressed its support to the ACCC to proceed as planned.

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Latest comments

AUSSIEtraveller says:
July 7, 2015 at 12:36 pm
pax are holding off booking flights to LAX for 2 reasons:-
1) Greek mess, is putting financial markets around the world in a mess & that generally delays peoples decisions
&
2) SYD/LAX on AA – will be opening specials on not only AA but other carriers, who need to match specials.
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