BUSINESS American Airlines, Qantas re-seek US nod for joint venture after rejection in 2016

BUSINESS

American Airlines, Qantas re-seek US nod for joint venture after rejection in 2016

Reuters-Global Times

23:26, March 01, 2018

American Airlines Group Inc (AA) and Qantas Airways Ltd are making a second attempt at gaining US regulatory permission for a venture that would allow them to coordinate prices and schedules, threatening to cancel services if they are rejected.

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An American Airlines jet takes off from Washington National Airport in Washington, U.S., August 9, 2017. (Photos:Reuters)

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FILE PHOTO - A worker unloads a Qantas Airways Boeing 747 at Sydney's International airport in Australia. 

The pair's application for a joint venture covering the US, Australia and New Zealand was rejected in 2016 under the Obama administration amid opposition from rival carriers Hawaiian Airlines Inc and JetBlue Airways Corp.

The airlines have said they hope the new administration will look more favorably on an application as US President Donald Trump has promised to boost the US industry through lighter regulation and a more hands-off approach to anti-trust enforcement.

"The proposed joint business will significantly improve services, stimulate demand and unlock more than $300 million annually in consumer benefits that are not achievable through any other form of cooperation," Qantas said in a statement on Tuesday.

The statement added that a rejection could result in the Australia's flagship airline reducing the frequency of, downgrading or even canceling of its A380 services between Sydney and Dallas/Fort Worth, while AA may further reduce services between Los Angeles and Sydney and Auckland.

At the moment, American Airlines and Qantas rely on codeshare agreements to make those routes economically viable. 

If the venture is approved, the two airlines could offer more flights, including to cities not currently served by either.

Regulators in Australia and New Zealand had approved the first application for the joint venture before it was rejected by the US.

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