The United States is preparing to approve the American Airlines-Qantas project on an interim basis



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A Boeing Co. B777-300ER aircraft operated by American Airlines Group Inc. is located inside the Qantas Airways Ltd. hangar. at Sydney Airport in Sydney, Australia on Friday, November 13, 2015.

Brendon Thorne | Bloomberg | Getty Images

The US Department of Transportation is expected to give its tentative agreement to an offer by American Airlines and Qantas Airways to operate a joint venture, announced Sunday two people informed about it.

According to sources, the ministry is expected to make an order provisionally approving the common trade agreement and provisionally granting antitrust immunity, on condition of anonymity.

The order, expected Monday and expected to be commented by the public, will likely include conditions to protect competition and allow the government to monitor the project, added the sources.

A spokesman for the department declined to comment on the case.

The application by American and Qantas for a joint venture covering the United States, Australia and New Zealand was provisionally rejected in November 2016 by the administration of former President Barack Obama, in the face of opposition from rival carriers Hawaiian Airlines and JetBlue Airways.

Australian and New Zealand regulators approved the first joint venture application before it was rejected by the US Department of Transportation.

Shannon Gilson, spokesperson for American Airlines, said on Sunday that the airline believed that "we have made compelling arguments regarding the benefits of the joint venture for customers, and no opposition to it. has been formulated against our proposal.We hope that the Qantas Joint Venture will be approved. "

In February 2018, American and Qantas attempted a second time to obtain US regulatory clearance under the administration of President Donald Trump for a company allowing them to coordinate prices and schedules, threatening to cancel services if this service was rejected and arguing that it could "unlock" up to $ 310. million per year in benefits for the consumer.

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 is an arrangement between airlines in which two or more companies publish and advertise a single flight under their own 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 require other carriers to take steps to improve schedules and prices.

Qantas said last year that the joint venture would allow both companies to "dramatically improve service" and "boost demand". The airlines said the agreement could generate each year up to 180,000 new trips between the United States, Australia and New Zealand.

The airlines said that if the offer was rejected, Qantas would likely reduce frequency, downgrade or even cancel its A380 service between Sydney and Dallas / Fort Worth, while American could reduce further service between Los Angeles, Sydney and Auckland.

Airlines began sharing codes on their respective flights in 1989, co-founded the "oneworld" marketing alliance in 1999 and formed a deeper partnership in 2011 without antitrust immunity.

American Airlines and Qantas are currently relying on code-sharing agreements to make these routes economically viable. If the company approves the company definitively, the two companies could offer more flights, including to cities that are not currently served by one or the other, they said.

In 2001, US regulators approved similar joint venture agreements with United and Air New Zealand and in 2011 with Delta Air Lines and Virgin Australia.

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