Aviation

ACCC backs reauthorisation of Qantas-American Airlines alliance

The Australian Competition & Consumer Commission (ACCC) is proposing to reauthorise the alliance between Qantas and American Airlines for a further five years.

The alliance enables Qantas (and Jetstar) to cooperate with American Airlines on trans-Pacific routes between Australia/New Zealand and the US, Canada and Mexico.

ACCC commissioner Sarah Court said the public benefits from the alliance are likely to continue under this reauthorisation.

“Passengers travelling on trans-Pacific routes could benefit through enhanced products and services, including a greater likelihood of increased capacity and new routes; increased connectivity and improved schedule choice,” she said.

“Loyalty program benefits and improved lounge access, cost savings and efficiencies are also likely to be a result.”

The ACCC noted the extent to which these public benefits are likely to be realised depends on the rate of recovery in demand for trans-Pacific services following the COVID-19 pandemic.

Authorisation will allow the two airlines to coordinate on a range of matters, including marketing and sales, freight, pricing, scheduling, distribution strategies including agency arrangements, yield and inventory management, frequent flyer programs, lounges, joint procurement, and product and service standards.

“The alliance is unlikely to result in any significant public detriment, because the ACCC considers that American Airlines would be unlikely to operate its own trans-Pacific services, or materially expand its trans-Pacific capacity and frequency, in the absence of its alliance with Qantas,” Court said.

The ACCC has also granted interim authorisation to allow the airlines to continue their alliance beyond 18 March 2021, when their current authorisations are due to expire.

The competition watchdog is now seeking submissions from interested parties in relation to its draft determination on the reauthorisation of the Qantas-American Airlines alliance.

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