American Airlines argues why it should not serve Australia

AA 77W.jpgAmerican Airlines will next year start taking delivery of Boeing 777-300ER aircraft, above, but the carrier says it will not fly them to Australia. Image: Boeing

American Airlines says its suboptimal long-haul fleet and pilot contract restrictions prohibit it flying to Australia.

The oneworld partner discussed its network strategy in its application to the US Department of Transportation for approval of a joint business agreement with Qantas.

AA says the six Boeing 777-300ER aircraft it has on order (thrice the number it had on the books in January) “are not yet committed to particular routes” but “given that American is currently short on long range aircraft to serve its existing routes, American will be carefully considering where these assets will be deployed and how they will be configured”.

Furthermore, AA says:

the terms of American’s current collective bargaining agreement with the Allied Pilots Association would not permit service to Australia/New Zealand. That agreement contains a 14:30 flight time limitation. According to block times published by Qantas, service from Sydney to Los Angeles has an elapsed time of 14:35 to 15:00 depending on equipment type flown. Service from Sydney to Dallas/Fort Worth has an elapsed time of 15:25.

But as colleague Dan Webb points out on Things in Sky, AA can request exemptions from its pilots union as their agreement “contains language governing extended long-haul flying…on a city pair-specific basis only, which means airline management must secure an agreement with APA”.

AA secured such an exemption for its Dallas-Beijing proposal (which did not materialize), and furthermore, as Dan points out, AA’s Chicago-Delhi route has a block time of 14 hours and 40 minutes, five minutes longer than the 14:35 Qantas block time cited.

Regulators say permission to coordinate business, be it this proposed JBA or other anti-trust immunity cases, should be granted to carriers who show a commitment to the respective market and will bring public benefit. While there may be some benefit, is AA really showing its best commitment by saying new, range-opening aircraft are better used elsewhere and failing to disclose the full extent of its agreement with pilots?

The carriers are trying to brush off the notion of AA not serving Australia, but it is a significant matter and needs close scrutinizing by the DOT and ACCC.

Qantas and AA previously applied to the ACCC in an application that made it explicitly clear, but did not explain why, American Airlines would not enter the trans-Pacific route–sometimes saying so twice on one page. The application concluded the two “are not true competitors on the these routes and there can be no detriment to competition resulting from the implementation of the Proposed JBA.”

Approval for the JBA, which targets schedule and fare coordination, would grant AA not just advantages of codesharing but also many of the benefits of serving the route without actually flying it. That seems to give AA no reason to enter the market, which invalidates their “no detriment” argument about the JBA.

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