Qantas CEO Alan Joyce says American Airlines operating the Los Angeles-Sydney route gives the world’s biggest airline “skin in the game”, helping ensure the success of the two airlines’ new joint venture partnership.
American Airlines and Qantas have been codeshare partners on the trans-Pacific for 25 years, but American will return to the Australia-US market with its own ‘metal’ for the first time since the early 1990s when it commences daily Boeing 777-300ER services between LA and Sydney from December 19, a key part of the airlines’ new revenue sharing joint venture partnership.
“But what was very clear with the codeshare was … American didn’t have any skin in the game and it does mean probably your organisation, your people are not excited about a destination,” Joyce told a media lunch in Sydney on Friday.
“And what we find is if skin gets in the game, ie you’re flying your own aircraft as part of a bigger joint venture, it works a lot better.”
Joyce was hosting American Airlines chairman and CEO Doug Parker who was visiting Sydney to promote his airline’s new services to Australia.
“It’s a big day for American,” Parker said.
“The day is made possible due to our relationship with Qantas, we wouldn’t be flying on this route if we didn’t have the joint venture in place. We wouldn’t have announced the service that we announced earlier this week to Auckland if we didn’t have the joint venture in place.”
That “big day” saw American fly one of its brand new 777-300ERs to Sydney to give corporate customers, travel industry representatives and media an opportunity to inspect the aircraft ahead of the December 19 inaugural, part of an effort, Parker said, to change perceptions of his airline.
“We don’t do this generally,” Parker said of flying the 777 to Australia for promotional activities. “But this isn’t a normal event,” he said.
“It was really, really important because this market is so important. We recognise since it has been so long since American has been flying here that there may be some misperceptions about what American is today, so we wanted to help educate as to what the new American looks like.”
That’s important as Qantas will be selling seats on the American flights as if it were its own, with both airlines keen to stress their interdependence on each other to make their JV a success.
For example, American marketing US-Australia routes to its 100 million-strong frequent flyer base “is going to improve the pie for all of us” Joyce said.
“Our operation is dependent on American’s success in promoting that and American’s success is dependent on us making sure that Australians and our market continues to flow on to it.”
The JV has already seen one new route added, with American to operate daily Boeing 787-8 services from LA to Auckland from June next year. But Joyce flagged more new routes and opportunities are yet to come. such as Qantas operating Melbourne-Dallas Fort Worth with its forthcoming Boeing 787-9s.
“That’s a few years away, 2017 is when the first [787-9] is coming. And if Dallas keeps on growing and the partnership keeps on enhancing we’ll be looking at those opportunities.
“We also said today the aircraft can do Sydney to Chicago, again that’s a huge American hub in Chicago as well. So there’s lots of opportunities this partnership opens up potentially,” Joyce continued.
“As Doug said to me, let’s walk before we run, we have to bed down what we have and there is a lot of growth going into what we have but we can build from there.”
Some of that growth, Parker explained, will come from being able to place the best aircraft on the best route from either airline.
“Another great example of the joint venture is that we have different fleets that have different planes that do different missions,” said Parker.
“We can’t fly DFW to Sydney but Qantas can, and consumers get that benefit and we share in that. And we have the better airplane right now to fly LA-Auckland with the 787, so we serve that.
“Frankly we are going to be indifferent as to which of our airplanes is flying it as this gets to be more and more a joint-venture. We won’t care and we’ll do what’s best for consumers by making sure we have the right airplane matched to the right mission.“