Regulators move to block further Qantas-American expansion
Friday, 21 Nov, 2016
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The US Department of Transportation has blocked the application of Qantas and American Airlines to expand their joint venture.
In a tentative ruling DOT said the alliance would be anti-competitive.
"By combining the airline with the largest share of traffic in the US-Australasia market with the largest airline in the United States, the proposed alliance would reduce competition and consumer choice," it said.
"Given the degree of market concentration, the probability of such concentration further increasing with an integrated transoceanic, Qantas’ position in the market and its ability to charge a significant premium over other carriers, there is considerable risk of competitive harm."
The federal agency said it had received objections from both Hawaiian Airlines and JetBlue Airways.
American and Qantas had asked for anti-trust immunity to coordinate on US to Australasia routes.
American said it plans to file an objection to the ruling.
"This represents a significant departure from prior DOT decisions, which have long recognised the pro-competitive benefits of combining complementary international networks.
"Other airlines have the significant competitive advantage of antitrust immunity in the US-Australasia market. With the same opportunity, American and Qantas will be able to compete more effectively and increase consumer benefits in the market," said American spokesman Matt Miller.
Miller was referring to the current joint venture agreements between Delta Air Lines and Virgin Australia and United Airlines with Air New Zealand.
Lisa
Lisa joined Travel Weekly nearly 25 years ago as technology reporter and then sailed around the world for a couple of years as cruise correspondent, before becoming deputy editor. Now freelance, Lisa writes for various print and web publications, edits Corporate Traveller’s client magazine, Gateway, and works on the acclaimed Remembering Wildlife series of photography books, which raise awareness of nature’s most at-risk species and helps to fund their protection.
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