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US government approves American-Qantas JV

The US Department of Transportation has approved the proposed joint venture between American Airlines and Qantas, clearing the final barrier to the carriers' plans to coordinate transpacific flights.

"We have concluded that, overall, the alliance and [joint business agreement] will be procompetitive and are likely to generate substantial benefits for the traveling public," says the DOT in a 19 July order.

The order both approves the tie up and grants the joint business immunity from anti-trust laws.

”AA and Qantas do not need any more approvals before implementing the JV," American tells FlightGlobal.

American does not say when the partnership will take effect, but the DOT order requires the carriers implement the deal within six months.

The deal calls for the carriers to coordinate pricing, sales, planning and other business functions on flights between North America and both Australia and New Zealand.

American and Qantas have positioned the venture as enabling them to more-effectively compete in a market largely controlled by two existing airline joint ventures: Delta Air Lines' deal with Virgin Australia and United Airlines' agreement with Air New Zealand.

"American and Qantas now have the opportunity to jointly offer more products that will better serve customers flying between the United States and Australia and New Zealand," American says in a media release. "This has been a longstanding business objective of the partnership."

"We now have the opportunity to launch new routes and provide enhanced service with better schedules, additional frequent flyer benefits and continued investments in the overall customer experience," American chief executive Doug Parker says in the release.

Over "the next few years" the airlines have said they intend to add new flights between North America and Australasia.

The DOT order requires American and Qantas to, within seven years, perform "self assessment" of their partnership and of market effects. The assessment must address items such as capacity, technology investment and travel demand, according to the DOT's order.

American and Qantas first submitted their proposal in 2015 but withdrew that request after the DOT denied the deal based on competitive factors.

The carriers refiled their application in February 2018, saying they would do more to increase capacity, reduce travel times and improve competition, DOT documents show.

The DOT tentatively approved that application on 31 May.

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