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Qantas seeking more US routes

Qantas and American Airlines plan to add at least two new trans-Pacific routes over the next five years if they receive final regulatory approvals for their joint venture on flights between Australasia and mainland North America.

In a detailed submission filed with the United States Department of Transportation, the partners said the new routes, which were not named, were already under consideration. 

Qantas chief executive Alan Joyce has publicly raised the potential for Melbourne-Dallas flights once the airline begins receiving new Boeing 787-9 aircraft from 2017.

The documents said American Airlines, which began flying on the Sydney-Los Angeles route last month and will start services on the Auckland-Los Angeles route in June, was also considering more routes.

Since Qantas and American Airlines announced their intention to deepen their alliance in June, United Airlines has unveiled plans for Auckland-San Francisco flights and Air Canada has announced plans for Brisbane-Vancouver flights.

"These responses are not surprising given the well-documented impact of immunised alliances on evoking competitive responses from rivals," Qantas and American Airlines said.


As part of their proposed alliance, Qantas and American Airlines will share revenue on flights to the mainland US and Canada but not on flights to and from Hawaii.

The revenue will be allocated in line with the amount of capacity on the joint routes, with American Airlines set to receive 11 per cent as a result of its Sydney-Los Angeles flights. The percentage figure will rise once the Auckland-Los Angeles flights begin and American Airlines has a higher share of the joint capacity.

"American and Qantas are entirely indifferent as to whether that passenger flies on Qantas' Los Angeles-Sydney service or American aircraft," the carriers said. "Instead, because their incentives are fully aligned, their optimal strategy is to collaborate, innovate, and integrate their networks to generate as much traffic as possible on joint business routes."

The pair said in the absence of the joint venture, Qantas would have a financial incentive to direct passengers to its own aircraft rather than those of American Airlines and vice versa.

The Australian Competition and Consumer Commission has given draft approval to the joint venture and the New Zealand Ministry of Transport has given final approvals. However, a US ruling has taken longer than anticipated amid scrutiny of confidential documents by lawyers from rival carriers United Airlines, Air New Zealand and Hawaiian Airlines, as well as additional questions from the regulator.