Qantas American Partnership on Hold Bottom Line
The Qantas American Partnership is now put on hold after the airlines announced that they would limit codesharing. The only route affected is LAX-SYD. The airlines also rolled back elite benefits and mileage accrual. The Qantas American partnership has been through a rough patch the past few months. The airlines have run into issues with the DOT, and they warned about the viability of their routes if the Joint Venture was not accepted. The DOT rejected their JV application, and this is the first concrete reaction to this result we have seen.
The only route affected by the codeshare cut is the Los Angeles to Sydney Route. The airlines had been codesharing on their routes from the West Coast to SYD. The routes to Melbourne and Brisbane, as well as other routes to SFO and DFW, are unaffected. The airlines said that this would affect travel booked after Feb 1, but those booked for flights before Sept 30 would be unaffected.
The airlines have also curtailed their frequent flier accrual benefits on the route. They announced that the route would now accrue based on their usual Oneworld agreement. This means that any reciprocal agreements that there may have been between AA and Qantas are now limited to the Oneworld level.
The Qantas American partnership received a major blow last year when they got their JV rejected. The US DOT rejected their application on the basis of being against the consumer. The airlines argued that the DOT did not follow precedent, and acted against the consumer. The airlines cited similar partnerships with Delta-Virgin Australia and United-Air New Zealand. The ruling has caused consumers more access to Australia, but it has pushed Americans and Qantas to compete further on the route.
During the press conference, Qantas said that the airlines will reapply for their JV. With the clear case that the consumer has lost due to the ruling, they expect it to be approved this time around. The airline is hoping that the approval if reached, will enhance their partnership and open up new routes.
Qantas is a major investor at LAX. The airline also opened one of the largest hangars in the US at the airport. The hangar can hold four A380s or 747s. The airline’s CEO, as well as other VIPs, opened the hangar on Saturday.
I am not surprised that the airlines have cut their codesharing. It serves well to push the DOT into approving their JV. The airlines are punishing consumers based on the actions of the DOT. I would not be surprised if the DOT approved their new JV application. I really hope that they do, as flights such as SFO-SYD and DFW-SYD are probably dependent on that. One of the longest routes in the world is the latter. I have always wanted to take the DFW-SYD flight. With all the options to go to AUS-NZ, there is sufficient competition. A comparison of the options can be found here. We will have to wait and see.
What do you think? Should the DOT approve the Qantas American Partnership? Were you affected by this decision? Let us know!