Qantas (QF, Sydney Kingsford Smith) and American Airlines (AA, Dallas/Fort Worth) have abandoned plans to expand their existing transpacific partnership after the US Department of Transportation (DOT) refused to grant the two parties additional time to consider its decision.
In its order issued on Friday, November 18, the DOT refused to grant antitrust immunity to the two carrier's proposed metal-neutral revenue-sharing joint venture which would have covered North America on the one hand (inclusive of Canada and Mexico but exclusive of Hawaii and US territories in the Pacific), and both Australia and New Zealand on the other. The DOT said at the time that the proposed alliance would reduce competition and consumer choice.
The carriers were then given until December 2 to respond to the decision, a time frame they argued was too constrained given their need "to consider the reasoning and analysis” in the order, as well as to consider its “potential implications (...) for their respective business interests.”
The DOT, however, denied the request stating the reasons given for the request were not compelling and were "unpersuasive".
"...we find that the need for resolution of this issue outweighs any benefit of awaiting answers to the motion," the regulator said.
As such, American and Qantas have since issued a joint statement indicating they have now decided to withdraw their application for antitrust immunity. At the same time, they noted that their existing codeshare and Oneworld agreements would remain intact.
"Qantas and American Airlines will now separately assess their positions before deciding on next steps," they said. "Both carriers are committed to finding ways to work together more closely to deliver benefits to customers that neither could offer alone."
