Fellow Oneworld founding members Qantas and American Airlines were dealt a blow on Friday (November 18) when the US Department of Transportation (US DoT) blocked a bid to expand their joint venture.
The original application, submitted in June 2015, sought immunity from the US antitrust law to launch additional transpacific services between the US and Australia and New Zealand.
This would allow the carriers to jointly plan and coordinate on things like price and schedule.
However, the US DoT has tentatively denied the application, ruling that such a move would “create a potentially anticompetitive environment given the scale of the resulting joint business, which would account for approximately 60 per cent of seats between the US and Australia.”
The DoT suggested the move would leave passengers with few competitive options, as the US-Australasia markets are not well served by alternatives.
The airlines are expected to appeal the decision within the two-week deadline.
In a statement, America Airlines expressed its disappointment, referencing the fact that: “Other airlines have the significant competitive advantage of antitrust immunity in the US-Australasia market.”
As reported by the Dallas News, this includes the approved joint ventures between Delta Air Lines and Virgin Australia, and United Airlines and Air New Zealand.