American Airlines plans to further reduce its nonstop Auckland-Los Angeles operation with a longer period where the seasonal service will be suspended in 2018.
The airline said on Monday its services to Auckland, which were launched in June 2016, would operate on a seasonal schedule between October and March.
“We have taken a look at our Auckland/Los Angeles route and determined that next year, we will move to seasonal service from October to March, which is the peak winter travel season from the US,” American Airlines Australia and New Zealand general manager Simon Dodd said in a statement to Australian Aviation.
“Most importantly, we are not making any changes to our Auckland-based team as a result of these adjustments.”
Dodd said the airline would shortly contact affected passengers with alternative flights.
In April, the oneworld alliance member said it would switch its Auckland flights from year-round to seasonal and announced it would suspend the service for an eight-week period from August 5 2017.
The flights are scheduled to return on October 4 2017 and schedule updates filed with global distribution systems, which were reported by the AirlineRoute website, showed the flights would operate for about six months before it was again suspended in March.
The move represents another example of the winding back of American’s presence in this part of the world following the US Department of Transportation’s rejection of the proposed revenue-sharing joint-venture with Qantas in late 2016.
In May, American said it would downgauge its daily Sydney-Los Angeles service from the Boeing 777-300ER to the 787-9 from November, representing a reduction of about 25 seats a day.
There was also reduced cooperation with Qantas. In February, the Australian carrier removed its QF airline code on American’s Sydney-Los Angeles service, arguing the move was part of efforts to “scale back areas of cooperation that aren’t viable without immunity”.
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There were also tweaks to frequent flyer arrangements that came into effect on May 1, with Qantas cutting points and status credits earning rates on some American coded and operated services.
Qantas has maintained its QF airline code on American’s Auckland-Los Angeles service and on US domestic services.
The pair planned to plan to submit a new application to the United States Department of Transportation (DOT) for an expanded alliance on trans-Pacific routes, hoping a new administration at the DOT following the change of US president in January would come to a different decision.
Qantas international chief executive Gareth Evans said recently the two oneworld alliance members were still very keen to forge a closer working relationship.
“We do want to deepen that relationship in the way that we have talked about so we will be refiling the application in the next few months,” Evans told journalists on the sidelines of the International Air Transport Association (IATA) annual general meeting in Cancun, Mexico in early June.
“We’ve had many conversations with the Department of Transport in Washington, both ourselves and American through this process so they are fully briefed.
“So we will go through that application again. My understanding is it’s going to take much less time this time through but we will have to wait and see once we reapply.”
The Hill: Qantas Airways ramps up lobbying ahead of joint venture bid https://t.co/a2uPTuUI0J
— Kelly Yamanouchi (@atlairportnews) April 4, 2017
Qantas and American have worked closely together on the trans-Pacific market, albeit without anti-trust immunity (ATI). The pair started codesharing on each other’s flights in 1989 and helped establish the oneworld alliance as founding members.
American’s decision to start flights from Los Angeles to Sydney in December 2015 – and Los Angeles to Auckland in June 2016 – prompted the two carriers to seek ATI as part of an expanded joint business agreement to reflect the US carrier’s entry into the market with its own aircraft.
In February 2016, the Australian Competition and Consumer Commission (ACCC) authorised the JV for five years, while the New Zealand Ministry of Transport gave its approval in November 2015.
The ACCC decision meant that while Qantas and American were able to align pricing on tickets sold in Australia, the pair was not able to do so on outbound US fares without DOT anti-trust immunity.
The US end of the market has seen some extremely low fares in recent times as additional capacity from the likes of Qantas, American and United, as well as some currency changes that have affected demand and pushed down ticket prices.
More specifically, American fares for its own service to Sydney were regularly much lower than Qantas-operated flights, which put pressure on the financial performance of the Australian airline’s US operations.
Air New Zealand chief executive Christopher Luxon said during the airline’s investor day in May the outlook for the trans-Pacific market was better after an influx of capacity from everyone in recent times.
“The encouraging thing is that we’re starting to see an environment where those competitors are settling into the market here,” Luxon said.
“And so if you look at the American market, we’ve seen very good rational behaviour from competitors.”
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