The U.S Transportation Department is likely to allow a tentative agreement for a joint venture between American Airlines and Qantas Airways as well as granting antitrust immunity. The order is likely to include conditions to protect competition and allow for government oversight of the venture.
Earlier in 2016 during the Obama administration, the same application intended to cover U.S, Australia, and New Zealand was rejected over opposition from rival carriers like Hawaiian Airlines Inc and JetBlue Airways Corp (JBLU).
But this time the airlines have made a compelling case that included strong arguments in favor of coordination of price and schedules and unlocking of up to $310 million annually in consumer benefits. The application even threatened to cancel services, between Sydney and Dallas for Qantas and Los Angeles, Sydney and Auckland for American Airlines, if it was rejected.
The revised application also factored in the code sharing facility with other carriers, a process in which multiple publish and advertise a single flight under their own airline number. This leads to a reduction in prices and an improvement in service quality. The application argued that the joint venture has the potential to generate up to 180,000 new trips between the United States and Australia and New Zealand annually.
New routes for Qantas could include non-stop flights from Brisbane to Chicago, Dallas or Seattle.