Qantas, American Airlines reauthorised to cooperate on trans-Pacific routes

LONDON, UK - JUNE 3, 2017:  Commercial airliners parked near the northern fuel supplies at London's busy Heathrow Airport on a sunny summer morning.  Planes using the facility include British Airways, Americal Airlines, Cathay Pacific and Qantas.

The Australian Competition & Consumer Commission (ACCC) has reauthorised the alliance between Qantas Airways 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 and New Zealand, and the United States, Canada and Mexico.

“The ACCC considers the public benefits from this alliance are likely to continue under this re-authorisation,” ACCC commissioner Stephen Ridgeway said in a statement.

“Passengers travelling on trans-Pacific routes are likely to benefit through enhanced products and services, including a greater likelihood of increased capacity and new routes, increased connectivity and improved schedule choice.

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

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, the ACCC said. It said, the greater the demand for these services, the greater the public benefit that is likely to be realised.

Authorisation will now allow the two airlines to coordinate on 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,” Ridgeway said. “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 without its alliance with Qantas.”

The ACCC first authorised an alliance between Qantas and American Airlines for five years in 2011 and re-authorised the alliance in 2016.

Qantas and American Airlines had sought authorisation from the ACCC because the alliance involves conduct that would risk breaching the Competition and Consumer Act 2010 (CCA).

Featured image source: iStock/AmandaLewis

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