Qantas and American Airlines are seeking permission from Australian regulators to extend their Joint Venture partnership for a further five years.
While approval from US authorities has already been granted – and remains in place until July 2026 – current approvals from the Australian Competition and Consumer Commission (ACCC) had been set to expire in March 2021, unless an extension was applied for and granted.
The Joint Venture between Qantas and American Airlines allows the carriers to closely cooperate on routes from Australia and New Zealand to the United States, Canada and Mexico, and vice versa.
This includes coordinating fare prices, sharing revenue from each other’s flights, broad codesharing across the combined Qantas/AA transpacific network, and cost sharing as well: which is said to make new international routes more viable, when both airlines share the risk.
“There is no doubt that the metal neutral revenue sharing joint business … represents the fastest and most effective way to rebuild, sustain and ultimately grow transpacific capacity to the benefit of Australian consumers and businesses, particularly the crippled tourism industry,” reads the proposal filed with the ACCC.
“The successful reinstatement of Qantas’ transpacific services to levels in place prior to the pandemic and any future growth of those services will depend on re-authorisation of the Proposed Conduct,” the proposal continues.
Impact on frequent flyer points, status credits
Beyond the standard benefits afforded to passengers via the airlines’ mutual membership in the Oneworld alliance, the ability to earn points and status credits at higher rates on the opposing airline, and to spend points at more favourable rates on the same, is also part of the deal.
That was highlighted back in 2017, when Qantas chose to cut the number of Qantas Points and status credits that could be earned on AA flights, at a time when the US Department of Transportation (DoT) had not given a green light to the Joint Venture.
Fast-forward to 2019, after finally gaining that Stateside stamp of approval, and those higher earning rates were largely restored.
In the latest application to the ACCC, the airlines are taking a similar approach, warning that “customer benefits delivered by the joint business, including frequent flyer earn and redemption opportunities and improved customer services, will be significantly eroded if not removed entirely if the Restated JBA is not re-authorised.”
Qantas, AA flights between Australia/NZ and North America
With both airlines pausing flights from Australia and New Zealand due to the COVID-19 pandemic, American Airlines will bring back its Sydney-Los Angeles flights from November 12.
Prior to the shutdown, Qantas had been selling these services as part of its Joint Venture with American, and those codeshares are back for travel from the same date – giving passengers the ability to book AA flights through Qantas, with a QF flight number.
On the other hand, Qantas has closed bookings on its own flights to the United States until October 2021, leaving codeshares on American Airlines as the only option for Qantas passengers who have permission from the Australian Government to travel overseas.
“We've temporarily stopped selling on some of our other international routes like the UK and US until the end of October 2021, given the uncertainty in those markets and ongoing government restrictions,” a Qantas spokesperson previously confirmed to Executive Traveller.
Speaking at last month’s Qantas annual general meeting, CEO Alan Joyce said that “for some of our big destinations like the United States and the UK, it's going to need a vaccine (before travel can resume), given the high prevalence of the virus in both of those locations.”
In previous news, Virgin Australia and Delta Air Lines – rivals to the Qantas/American Airlines partnership – decided to pause their own Joint Venture agreement back in September 2020, in light of Virgin Australia’s decision to halt flights from Australia to the United States.
“The JV is reliant on Virgin Australia flying to LA again,” Delta’s General Manager of Australia, New Zealand and the Virgin Australia Joint Venture, confirmed to Executive Traveller at the time.
“That’s why we’re saying we’re pausing the relationship,” as opposed to terminating it, “because we both anticipate that Virgin Australia will fly to Los Angeles again: and when that happens, we look forward to restarting the Joint Venture.”