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A joint venture between American Airlines and Qantas has been cleared.
The US Department of Transportation has granted final approval to the airlines after a prior effort was rejected in 2016.
The common commercial agreement has been provisionally approved, granting airlines covering international service antitrust immunity.
US Secretary of Transportation Elaine Chao announced the announcement, noting that it was the first comprehensive review of a proposed joint venture airline under the Trump administration.
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A joint venture application covering the United States, Australia and New Zealand was rejected in November 2016 by the DOT of former President Barack Obama.
The review after 17 months concluded that the company "would reduce competition and consumer choice".
The agreement will allow airlines to coordinate their planning, pricing, sales and loyalty programs, with new options and customer service improvements.
The two OneWorld alliance carriers are planning up to three new routes in the first two years, as well as increased capacity on existing routes, the department said.
American Airlines did not comment immediately yesterday, but US CEO Doug Parker said last month that the joint venture would also create new jobs in airlines and industries.
In June, JetBlue Airways told DOT that it "will significantly reduce competition in the relevant markets".
The three major alliances between global airlines – OneWorld, SkyTeam and StarAlliance – will control 86% of the US-Australian market.
Similar agreements have been concluded in the past, with the United States having approved similar agreements between United and Air New Zealand in 2001 and for Delta Air Lines and Virgin Australia in 2011. However, airlines are required to carry out a car -evaluation of the impact on competition seven years after its entry into force and report to the government.
In February 2018, American and Qantas tried for a second time to obtain regulatory approval from the United States under the administration of President Donald Trump, as part of a company allowing them to coordinate prices and schedules.
The revised application made significant changes, including the removal of a provision that would prohibit one or the other carrier from sharing codes with other carriers. Code Sharing allows two or more carriers to publish and publish a single flight under their own flight number.
The airlines argued in their 2018 application that the airline would result in reduced fares and increased capacity as a "third most viable competitor" and would encourage other carriers to improve quality, schedule and prices.
Qantas added that this agreement would result in reduced travel times and fares, as well as more connections, starting with direct flights from Brisbane (Australia) to San Francisco and Chicago. These new routes will be operated on Dreamliner aircraft, scheduled for launch in April 2020, and will "add more than 170,000 seats in the Pacific each year."
The airlines said the agreement could generate each year up to 180,000 new trips between the United States, Australia and New Zealand.
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