WASHINGTON: The US Transportation Department is expected to provide tentative approval to a bid by American Airlines Group Inc and Qantas Airways Ltd to operate a joint venture, two people briefed on the matter said.
The department is expected to issue an order tentatively approving the joint business agreement and tentatively granting antitrust immunity, according to the sources, who spoke on condition of anonymity.
The order, which would be subject to public comment, is likely to include conditions to protect competition and allow for government oversight of the venture, the sources added.
The application by American and Qantas for a joint venture covering the United States, Australia and New Zealand was tentatively rejected in November 2016 by former President Barack Obama’s administration amid opposition from rival carriers Hawaiian Airlines Inc and JetBlue Airways Corp.
Regulators in Australia and New Zealand approved the first application for the joint venture before it was rejected by the US Transportation Department.
American Airlines spokeswoman Shannon Gilson said on Sunday the airline feels “we have made a compelling case about the benefits of the joint business for customers, and there was no opposition raised to our proposal. We’re hopeful the Qantas joint business will be approved.”
American and Qantas in February 2018 made a second attempt to gain US regulatory permission under President Donald Trump’s administration for a venture that would let them coordinate prices and schedules, threatening to cancel services if it was rejected and arguing it could “unlock” up to $310 million annually in consumer benefits.
The revised application made significant changes including removing a provision that would have barred either carrier from codesharing with other carriers. Codesharing is a arrangement between airlines in which two or more carriers publish and advertise a single flight under their own airline number.
The airlines argued in their 2018 application that the venture would lead to a reduction in fares and higher capacity as a “more viable third competitor” and require other carriers to respond with improvements to quality, schedules and price. — Reuters
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