Originally Posted by
Often1
To answer the above questions:
2. The rule exists because US carriers are generally-speaking prohibited from selling tickets within other countries. Thus, when UA operated a single service SFO-SYD-MEL, it was prohibited from selling SYD-MEL tickets as standalone.
Funny that you mention that example, because UA was allowed to operate standalone SYD <-> MEL for a while in 2001 after the collapse of Ansett Australia. They both sold standalone tickets and had mileage awards available for that domestic Australian route. Fares started at $99, and mileage redemptions were 10k economy / 15k business / 20k first.
SYD-MEL tag to be added in December has the details.