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Qantas, American reject Air NZ’s objections for delay to ACCC authorisation

written by australianaviation.com.au | July 6, 2015
American Qantas CEOs on 77W
American Airlines chief executive Doug Parker and Qantas chief executive Alan Joyce on board an American Boeing 777-300ER. (Qantas)

Qantas and American Airlines say the planned launch of their new services between Australia and the US cannot proceed without the green light from regulators and have described Air New Zealand’s objections as “misunderstanding the nature of the proposed conduct”.

The two oneworld alliance members are seeking Australian Competition and Consumer Commission (ACCC) approval for an updated joint business agreement (JBA) to reflect American’s plans to commence a daily Sydney-Los Angeles service with its own aircraft and Qantas’s return to San Francisco from December from December 2015.

The pair has also applied for interim authorisation from the ACCC, which would pave the way for ticket sales and other marketing and promotional activity to commence while the regulator continued with its assessment of the full application.

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Qantas and American say interim authorisation would give the new routes the best prospect of success.

“Interim authorisation is necessary and urgent,” Qantas and American told the ACCC in a submission dated July 3.

“Although the essence of the coordination remains the same, there is a risk that coordinating in respect of the new routes would technically not be covered by the existing agreements or, therefore, the existing authorisations.

“The ability to conduct a coordinated strategic campaign is the only way to enable a viable launch for these important new services.”

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Qantas and American’s submission were in response to Air NZ’s objections to interim authorisation.

Air NZ told the ACCC it believed the what Qantas and American were proposing did not require authorisation and were not appropriate without a full and considered analysis.

“There is no compelling reason why the agreement has to commence in December, given existing arrangements,” Air NZ said in its submission dated July 1.

“The parties already have authorisation to coordinate on designated routes under the original JBA, which is valid until June 2016.

Qantas and American said Air NZ’s objections reflected a “misunderstanding of the nature of the proposed conduct”, adding that the NZ flag carrier would be a “major beneficiary” of any holdup to interim authorisation.

“Air New Zealand’s stated concerns must be viewed in the context of the strategic advantage it would enjoy from delaying or diluting the success of the introduction of the Applicant’s new joint services,” the pair said.

Other groups, such as the Department of Infrastructure and Regional Development, Tourism Australia and the Australian Federation of Travel Agents, have told the ACCC they supported the expanded alliance between Qantas and American

Air NZ has been heavily promoting travel to North America from Australia via its Auckland hub in recent times, including sub-$1,000 fares on selected dates to San Francisco, Los Angeles and Vancouver. The airline is also launching two new routes – Auckland-Houston and Auckland-Buenos Aires – in December.

Meanwhile, American and Qantas have also flagged starting up direct flights from New Zealand to the US in direct competition with Air NZ.

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2 Comments

  • Craigy

    says:

    With QF resuming SYD-SFO flights, I wonder what impact that will have on ANZ AKL-SFO numbers given that the impetus to go through AKL to avoid LA will be deminished. Likewise if QF/AA join the AKL-LAX route, it will be interesting to see what impact that has on ANZ revenue.

  • John

    says:

    if AA/QF don’t get approval soon, they miss a lot of Xmas school holiday bookings. People won’t wait. Many are already booked for Xmas flights to USA/Canada (many Australians fly to Canada via LAX, as generally much cheaper than nonstop SYD/YVR + get a stopover option for kids in LA.

    + if you don’t live in SYD, no one wants to fly thru that bloody awful airport which is a major PITA is transferring from DOM to INT or v.v. & also incredibly time consuming.

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