American-Qantas Joint Venture approved (19 July 2019)
Jun 3, 2019, 2:31 pm
#16
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Just curious, how do you figure? It seems like the airfares are some of the highest to any destination between the US and a LH destination anywhere "popular" in the world.. That would indicate to me that there is a comparative lack of competition vs. many other destinations.
Jun 3, 2019, 2:42 pm
#17
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The AA plane down gauge was, at the time, attributed to the original JV application being declined. I'm comparing fares to similar popular destinations, and SYD has to be one of the highest.
Jun 3, 2019, 2:46 pm
#18
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There seems to be overcapacity on USA-Australia routes, especially LAX-SYD. At least during the southern hemisphere winter. If the JV goes ahead, it could result in AA cutting LAX-SYD, making it less than daily, or making it seasonal. This talk about "significantly improve service" and "stimulate demand" is just lip service - the airlines saying whatever they think regulators want to hear to get approval.
Recently economy (sale) fares Aust<--->USA have been lower than for some time.
Jun 3, 2019, 2:48 pm
#19
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Jun 3, 2019, 4:39 pm
#21
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JVs (theoretically) stimulate demand by adding new options. If AA no longer needs to operate LAX-SYD (because QF will do it for AA), then AA can fly another route that may attract new customers to Australia.
The question is what happens with pricing. QF and VA flights are expensive, in part, because their planes sit all day in the USA. That drives up operating costs and commands higher fares to compensate. The same isn't quite as true for AA/DL/UA, which can do standard turns in Australia and then do something else while waiting in the USA. But AA/DL/UA are clearly outsiders on routes down under.
In general, JVs just reduce competition and maintain or increase fares. All the while, consumers have no idea because they see different logos on the various planes. If you think about it, there are really only three competitors on trans-Atlantic routes. Try finding a reasonable fare from Philly to London these days. There's a reason the UK government is re-investigating the BA/AA JV.
The question is what happens with pricing. QF and VA flights are expensive, in part, because their planes sit all day in the USA. That drives up operating costs and commands higher fares to compensate. The same isn't quite as true for AA/DL/UA, which can do standard turns in Australia and then do something else while waiting in the USA. But AA/DL/UA are clearly outsiders on routes down under.
In general, JVs just reduce competition and maintain or increase fares. All the while, consumers have no idea because they see different logos on the various planes. If you think about it, there are really only three competitors on trans-Atlantic routes. Try finding a reasonable fare from Philly to London these days. There's a reason the UK government is re-investigating the BA/AA JV.
Jun 3, 2019, 8:41 pm
#22
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Last edited by JDiver; Jul 19, 2019 at 11:50 pm Reason: Activate web link
Jun 3, 2019, 10:12 pm
#23
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From https://www.ausbt.com.au/qantas-to-l...an-airlines-jv
<snip>
The Australian Competition and Consumer Commission (ACCC) has already given its tick to the trans-Pacific partnership, which would allow Qantas and American Airlines to closely co-ordinate on pricing, schedules, sales and frequent flyer programs under the shield of anti-trust immunity.
<snip>
Speaking on the sidelines of the International Air Transport Association (IATA) Annual General Meeting in Seoul, Qantas Group CEO Alan Joyce said new non-stop routes which Qantas could open up under the joint business agreement with Oneworld member American Airlines included Boeing 787 Dreamliner flights from Brisbane to Chicago, Seattle and Dallas.
“We have a number of different, very good routes and plans for a very good expansion into the US when it is approved."
Joyce has repeatedly cited direct flights to Chicago as first fruit of any American Airlines JV, although he has been somewhat pipped to the post by Air New Zealand's Auckland-Chicago flights which began in December 2018.
<snip>
The Australian Competition and Consumer Commission (ACCC) has already given its tick to the trans-Pacific partnership, which would allow Qantas and American Airlines to closely co-ordinate on pricing, schedules, sales and frequent flyer programs under the shield of anti-trust immunity.
<snip>
Speaking on the sidelines of the International Air Transport Association (IATA) Annual General Meeting in Seoul, Qantas Group CEO Alan Joyce said new non-stop routes which Qantas could open up under the joint business agreement with Oneworld member American Airlines included Boeing 787 Dreamliner flights from Brisbane to Chicago, Seattle and Dallas.
“We have a number of different, very good routes and plans for a very good expansion into the US when it is approved."
Joyce has repeatedly cited direct flights to Chicago as first fruit of any American Airlines JV, although he has been somewhat pipped to the post by Air New Zealand's Auckland-Chicago flights which began in December 2018.
<snip>
Jun 6, 2019, 7:12 am
#24
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The DOT press release. No additional detail there though:
WASHINGTON – U.S. Department of Transportation (DOT) Secretary Elaine Chao today announced that the Department has tentatively approved an application by American Airlines and Qantas Airways to operate a joint venture between the United States and Australia/New Zealand. If granted final approval, the carriers will coordinate their planning, pricing, sales, and frequent flyer activities to offer customers a single proposition on trans-Pacific flights, with new options and customer service enhancements.
Jul 19, 2019, 4:19 pm
#25
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American Airlines-Qantas joint venture wins final U.S. approval
The U.S. Department of Transportation (DOT) on Friday granted American Airlines Group Inc and Qantas Airways Ltd final approval to operate a joint venture after a prior effort was rejected in 2016.
The deal will allow the airlines to coordinate planning, pricing, sales and frequent flyer programs, with new options and customer service improvements. The two OneWorld alliance carriers are planning up to three new routes within the first two years as well as increased capacity on existing routes, the department has said.
Read in Reuters: link
The U.S. Department of Transportation (DOT) on Friday granted American Airlines Group Inc and Qantas Airways Ltd final approval to operate a joint venture after a prior effort was rejected in 2016.
The deal will allow the airlines to coordinate planning, pricing, sales and frequent flyer programs, with new options and customer service improvements. The two OneWorld alliance carriers are planning up to three new routes within the first two years as well as increased capacity on existing routes, the department has said.
Read in Reuters: link
Jul 19, 2019, 5:25 pm
#26
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American Airlines-Qantas joint venture wins final U.S. approval
The U.S. Department of Transportation (DOT) on Friday granted American Airlines Group Inc and Qantas Airways Ltd final approval to operate a joint venture after a prior effort was rejected in 2016.
The deal will allow the airlines to coordinate planning, pricing, sales and frequent flyer programs, with new options and customer service improvements. The two OneWorld alliance carriers are planning up to three new routes within the first two years as well as increased capacity on existing routes, the department has said.
Read in Reuters: link
The U.S. Department of Transportation (DOT) on Friday granted American Airlines Group Inc and Qantas Airways Ltd final approval to operate a joint venture after a prior effort was rejected in 2016.
The deal will allow the airlines to coordinate planning, pricing, sales and frequent flyer programs, with new options and customer service improvements. The two OneWorld alliance carriers are planning up to three new routes within the first two years as well as increased capacity on existing routes, the department has said.
Read in Reuters: link
" The U.S. DOT is, however, requiring American and Qantas to perform a self-assessment of the venture’s impact on competition seven years after it takes effect and report their findings to the government."
Yeah, I wonder how that report will come out, if ever..
" The revised application made significant changes, including removing a provision that would have barred either carrier from code-sharing with other carriers. Code-sharing allows two or more carriers to publish and advertise a single flight under their own flight number. "
A little confused on this one?? Who exactly could AA alternatively code-share with in lieu of QF on direct routes between the US and Australia? Now if this means respective "domestic" flghts, that might make some sense, but not much.
Jul 19, 2019, 5:54 pm
#27
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<snip>
" The revised application made significant changes, including removing a provision that would have barred either carrier from code-sharing with other carriers. Code-sharing allows two or more carriers to publish and advertise a single flight under their own flight number. "
A little confused on this one?? Who exactly could AA alternatively code-share with in lieu of QF on direct routes between the US and Australia? Now if this means respective "domestic" flights, that might make some sense, but not much.
" The revised application made significant changes, including removing a provision that would have barred either carrier from code-sharing with other carriers. Code-sharing allows two or more carriers to publish and advertise a single flight under their own flight number. "
A little confused on this one?? Who exactly could AA alternatively code-share with in lieu of QF on direct routes between the US and Australia? Now if this means respective "domestic" flights, that might make some sense, but not much.
examples (just a guess, without any proof)
BA LHR-LAX-BNE
AS SEA-SFO-MEL
Jul 19, 2019, 8:46 pm
#28
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codesharibg
It means, for example, that AA can’t prevent QF from codesharibg with other us carriers. For example, QF is bulking up their presence at SFO. AA doesn’t have huge connectivity there. QF has been expanding their codeshares with AS at SFO due to AS’s large SFO network. Removing that clause allows QF to expand the relationship with AS and support their SFO flights. Otherwise AA could have stopped that. That's your example.
Two things out of the Reuters article stood out, and/or gave me a chuckle:
" The U.S. DOT is, however, requiring American and Qantas to perform a self-assessment of the venture’s impact on competition seven years after it takes effect and report their findings to the government."
Yeah, I wonder how that report will come out, if ever..
" The revised application made significant changes, including removing a provision that would have barred either carrier from code-sharing with other carriers. Code-sharing allows two or more carriers to publish and advertise a single flight under their own flight number. "
A little confused on this one?? Who exactly could AA alternatively code-share with in lieu of QF on direct routes between the US and Australia? Now if this means respective "domestic" flghts, that might make some sense, but not much.
" The U.S. DOT is, however, requiring American and Qantas to perform a self-assessment of the venture’s impact on competition seven years after it takes effect and report their findings to the government."
Yeah, I wonder how that report will come out, if ever..
" The revised application made significant changes, including removing a provision that would have barred either carrier from code-sharing with other carriers. Code-sharing allows two or more carriers to publish and advertise a single flight under their own flight number. "
A little confused on this one?? Who exactly could AA alternatively code-share with in lieu of QF on direct routes between the US and Australia? Now if this means respective "domestic" flghts, that might make some sense, but not much.
Last edited by JDiver; Jul 19, 2019 at 11:48 pm Reason: Close quote
Jul 20, 2019, 2:14 am
#29
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Primary source document -- the DOT's final order -- is here: https://www.regulations.gov/document...2018-0030-0144