DOT Blocks American / Qantas Joint Venture, New AA Flights to Blame?

It seems that American may have foiled their own plans for a US-Australia joint venture with oneworld partner Qantas. The DOT rejected the American / Qantas joint venture bid this morning due to competitive concerns. Of course, Delta has a joint venture in the market with Virgin Australia, while United maintains one with Air New Zealand. American and Qantas first applied for their joint venture in June 2015 and were not happy with today’s ruling:

“We’re very disappointed in the tentative decision and will file an objection. Other airlines have the significant competitive advantage of antitrust immunity in the U.S.-Australasia market. With the same opportunity, American and Qantas will be able to compete more effectively and increase consumer benefits in the market.”

A few months after filing for the joint venture, American returned to the Australia market with their LAX-SYD flight and then added LAX-AKL just a few months later. The DOT seems to think that the addition of these flights (and AA’s size) prove that the carrier can successfully launch routes and compete in the market on their own.

“American is likely the only remaining U.S. airline positioned to enter and expand services in a competitively significant and timely manner, given its resources and network size. The expanded alliance would create a potentially anticompetitive environment given the scale of the resulting joint business, which would account for approximately 60% of seats between the U.S. and Australia.  DOT also noted that consumers would have few remaining competitive options because the U.S.-Australia/New Zealand markets are not well served by alternative routings over third countries.”

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