Before the end of the Obama administration, the Department of Transportation rejected American Airlines’ application to expand its antitrust-immunized joint venture with Qantas, arguing that it would harm competition, even though Australia and New Zealand authorities had already signed off
The DOT argued that American and Qantas weren’t growing service more than they’d expect to happen anyway. There’s no consumer benefit to the arrangement — and thus they refused to approve it — if they didn’t expect more flights to result.
Instead of letting the DOT actually reject the application, they withdrew it, deciding to wait for the Trump administration and a new Secretary of Transportation to resubmit. Now Qantas has brought on lobbyists to work the case.
And American is making a bunch of changes that sure look like they want to show the Department of Transportation that they won’t offer as many seats across the Pacific, or give customers as many miles, without approval of the joint venture.
- American Airlines is reducing capacity Los Angeles – Sydney, replacing their Boeing 777-300ER with a smaller Boeing 787-9. Fewer seats, fewer business class seats, and no first class. Oddly this happens in November, just as traffic on the route should be picking up.
Boeing 787-9 Business Class - They’re suspending Los Angeles – Auckland for 8 weeks ending in October. The flight will be back for high season as a Boeing 787-9 (it’s currently operated by a Boeing 787-8).
Boeing 787-9 - And they’re reducing AAdvantage mileage earning for flights on Qantas.
- Premium economy R and T fares will no longer earn more than one mile per mile flown while elite qualifying dollars earned are being shaved back from 22% of miles flown to 20% on these fares.
- In economy, H fares drop from 100% to 50% mileage earning (and qualifying dollars cut from 20% to 10%)
- N, G, and S fares in economy drop from 50% to earning just 25% of miles flown (with qualifying dollars cut from 10% to 5%).
This sure reduces the incentive for American customers to fly on Qantas. Meanwhile, Qantas is doing something similar to their own Frequent Flyer program for travel on American.
- Premium economy R and T fares will no longer earn more than one mile per mile flown while elite qualifying dollars earned are being shaved back from 22% of miles flown to 20% on these fares.
These changes may make operational sense, the truth is that American probably can’t support as much capacity without close cooperation with Qantas. And to make the point they’re showing they can’t even fly to Auckland year round.