Qantas, American Airlines seek partnership extension to 2026

Both airlines see a continuing coalition as the "fastest and most effective way" to get more transpacific flights back in the air.

By Chris Chamberlin, November 3 2020
Qantas, American Airlines seek partnership extension to 2026

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.”

Read: Qantas closes bookings on US, UK flights to Oct 2021

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.”

Also read: Oneworld moves forward with alliance-wide upgrades

Chris Chamberlin

Chris Chamberlin is the Associate Editor of Executive Traveller, and lives by the motto that a journey of a thousand miles begins not just with a single step, but also a strong latte, a theatre ticket, and later in the day, a good gin and tonic.

17 Jun 2020

Total posts 161

ACCC should not renew this partnership and call Qantas' bluff. Delta and United kept flying, whilst American will resume service anyway. 

Given both QF and AA are oneworld members, customers are no better or worse off with or without a joint business. 

Qantas - Qantas Frequent Flyer

04 Nov 2017

Total posts 259

DL and UA had subsidies from freight contracts and/or USA taxpayer money to keep their flights operating despite it being mostly empty on the passenger front and the taxpayer funds/freight money largely covering the losses on the passenger front.

Had QF been afforded the same continous subsidy from the Aust Government (as opposed to the occasional taxpayer funded repatriation charters and/or reccurring freight contracts) I'm sure QF would've still "been flying" continously as well.

Virgin Australia - Velocity Rewards

24 Jan 2018

Total posts 370

Are you sure, DanV?  I frequently compared DL and VA fares to LAX and always, ALWAYS found VA to be materially cheaper.  If DL were enjoying US-Gov't subsidies on their LAX-SYD sector I'd have thought that would have 'facilitated' lower airfares that at least matched VA, if not slightly undercut them just enough to fill the cabin?  

Is there more to this than you've had time to explain?  Dan, asking purely out of curiosity, not to argue. Any insights you can share would be appreciated.  TIA.

Qantas

19 Apr 2012

Total posts 1137

Boeing at moment they are strictly rationed to 30-40 passengers per flight (mostly business class) so not sure what you mean by filled the cabins. There is absolutely no reason to lower prices and a huge incentive to raise them.

Virgin Australia - Velocity Rewards

24 Jan 2018

Total posts 370

I do apologise Patrick, you may well be correct, I failed to 'date stamp' the observations mentioned in my post, but for the avoidance of doubt they were made in pre-Covid times (mostly during 2018-2019).  I haven't had the need to book and compare an international airfare since returning home from the last trip in mid-February.  

Qantas

19 Apr 2012

Total posts 1137

KW72 as noted Delta and United are flying largely cargo runs which Qantas is also doing with its two 747-8s each with 130 tonnes capacity so not sure what your point is. The joint business  partnership is about passengers not freight.

04 Nov 2020

Total posts 3

Yes, Qantas is flying freight, though it’s 2 wet lease 747 from Atlas Air, so not exactly Qantas staff or aircraft.

But anyway, think it’s great with the JV, at least this way customers can still fly “Qantas” and redeem points etc, “just” operated by AA.

Qantas

19 Apr 2012

Total posts 1137

Kenneth until recently much of qantaslink was on on a wet lease arrangement with Cobham and they were certainly  counted. The 748s are not operated on a JV arrangement with Atlas, and have QF flights number, so not sure why they shouldn't  be 'counted'.

04 Nov 2020

Total posts 3

For sure they have to be counted. As well as this JV with AA should be approved, this way QF is still offering services to the US, though operated by AA. Which somehow can be compared to the freight 747 operations. It’s a QF service, operated by...

So critics saying QF stopped pax service, it’s not entirely true. It’s just not with QF registered aircraft.

Qantas

19 Apr 2012

Total posts 1137

Kenneth the point made by original poster is the others got subsidies to fly freight and therefore fly continuously. My point is Qantas flies freight also continuously on its own wet leased planes...operated by Qantas effectively as much as QantasLink was (earlier) ‘operated’ by Qantas.

AT
AT

Qantas - Qantas Frequent Flyer

14 Sep 2012

Total posts 328

A continued strong JV between Qantas and American is only better off for all stakeholders, period! 


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