US GOVERNMENT SEEKS MORE INFORMATION ON PROPOSED AMERICAN AIRLINES, QANTAS ALLIANCE


The United States Department of Transportation (DOT) has asked American Airlines and Qantas for more details on its proposed expanded alliance and joint-business agreement (JBA).

The DOT said on Wednesday it had reviewed the pair’s application for antitrust immunity (ATI) that was lodged in February, as well as supporting confidential documents.

However, it said the review indicated further information was required to “evaluate the joint applicants’ claims that their immunized joint business will deliver the public benefits claimed in this application”.

The information requested included specific levels of service that the proposed joint business would provide; the extent to which antitrust immunity is necessary to achieve these benefits; discussion of codeshare plans; clarification on revenue share methodology and potential enhancements in yield management practices under a potential immunized joint venture; further explanation of expected consumer benefits; and financial performance data for existing flights.

“When the additional evidence requested has been submitted, we expect to have all the necessary elements to determine that the record is substantially complete and to establish a procedural schedule,” the DOT said in its 19-page order.

American Airlines chief executive Doug Parker and Qantas chief executive Alan Joyce on board an American Boeing 777-300ER in Miami in 2015. (American/Qantas)

In February, American and Qantas submitted their application to the DOT expanded alliance with anti-trust immunity (ATI) on trans-Pacific routes.

It was the pair’s second attempt to forge a closer relationship, coming 15 months after the DOT knocked back the first bid to work more closely together arguing it would harm competition and reduce consumer choice.

American and Qantas have forecast an estimated $310 million annually in incremental consumer benefits should the alliance be approved.


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