The US Transportation Department is assumed to offer a provisional approval to a bid planned by American Airlines and Qantas Airways to function as a joint venture. The ventures hope that the department provides a tentative approval for the joint business agreement and temporarily allowing antitrust immunity. The order is believed to be approved by this week. The basic reason for the order is to safeguard the competition and also let the government supervise the venture. The American and Qantas’s application for a joint venture covering the US, New Zealand, and Australia had earlier been canceled in November 2016 by President Barack Obama’s administration due to the objection from rival carriers Hawaiian Airlines and JetBlue Airways.
The regulators in Australia and New Zealand had accepted the application even though the US Transportation Department had rejected it. The benefits of the joint business for customers are quite high. In 2018, another attempt was made by American and Qantas in February for the US regulatory permission in the President Donald Trump’s administration so as to help them coordinate prices and schedules or else threatened to cancel all its services and also open $310 Million on a yearly basis in the consumer benefits.
The new application had changes like the removal of the provision that had prohibited one carrier codesharing it with the other. The joining would lead to a fall in the fares and higher capacity. It could help improve the services and also enhance the demands. If the application was to be accepted then it would lead to 180,000 new trips between the United States and Australia and New Zealand yearly. The cancellation would lead to rejection of flight services Qantas in Dallas or Fort Worth and Sydney plus reduction of services by Americans in Los Angeles, Auckland, and Sydney. In 2001, similar joint venture agreement was accepted by the US regulators for the United and Air New Zealand and also for Delta Air Lines and Virgin Australia in 2011.