Qantas will scrap some code-sharing and loyalty points reciprocity with American Airlines, in a move that will hurt customers but the carrier says will help convince United States authorities to approve a formal tie-up between the two companies.
The Flying Kangaroo confirmed on Saturday it would re-apply to the US Department of Transportation for immunity from anti-competition laws so it can launch a lucrative but as-yet elusive joint venture with American.
More National News Videos
- Video duration
- 06:20
Qantas unveils new safety ad
Qantas unveils new safety ad
Qantas has unveiled a new inflight safety video featuring prominent Australian landscapes and locations. (Video: Qantas)
Up Next
Trump calls Turnbull about refugee deal
- Video duration
- 00:28
- Video duration
- 00:28
Trump calls Turnbull about refugee deal
Trump calls Turnbull about refugee deal
In a 25-minute call with Malcolm Turnbull, Donald Trump said he will honour the Manus and Nauru deal. (Video courtesy: ABC News 24)
Up Next
Plane wreckage pulled from Swan River
- Video duration
- 00:26
- Video duration
- 00:26
Plane wreckage pulled from Swan River
Plane wreckage pulled from Swan River
The remainder of the wreckage of a sea plane that fatally crashed into Perth's Swan River on Australia Day has been retrieved and sent off for examination. (Video ready: ABC News 24)
Up Next
Bodies recovered after failed NT river crossing
- Video duration
- 00:28
- Video duration
- 00:28
Bodies recovered after failed NT river ...
Bodies recovered after failed NT river crossing
Three bodies have been recovered after a crowded 4WD was swept into the flooded Moyle River in the territory's north-west. (Video courtesy: ABC News 24)
Up Next
'Same problems as London': Morrison doubles down on negative gearing
- Video duration
- 03:04
- Video duration
- 03:04
'Same problems as London': Morrison ...
'Same problems as London': Morrison doubles down on negative gearing
High property prices in the UK show that Australia's housing affordability crisis is not related to negative gearing, Treasurer Scott Morrison told business leaders in Marylebone, in the UK.
Up Next
The debt ceiling fight
- Video duration
- 01:45
- Video duration
- 01:45
The debt ceiling fight
The debt ceiling fight
Former Treasurer Joe Hockey and current Shadow Treasurer Chris Bowen comment on the realities and pitfalls of raising Australia's debt ceiling.
Up Next
Will Abbott challenge for the top job?
- Video duration
- 01:54
- Video duration
- 01:54
Will Abbott challenge for the top job?
Will Abbott challenge for the top job?
Tension has persisted between the Prime Minister and the man he rolled for the top job way back in September 2015.
Qantas unveils new safety ad
Qantas has unveiled a new inflight safety video featuring prominent Australian landscapes and locations. (Video: Qantas)
The DoT indicated it would reject Qantas' first application late last year because it would concentrate too much market share. That put a brake on the deal, which involved the airlines sharing revenue and marketing costs on trans-Pacific flights and scheduling new routes between Sydney and San Francisco and Los Angeles.
Speaking in Los Angeles on Saturday (Australia time), Qantas chief executive Alan Joyce said the airlines were close to re-filing its application to the DoT.
Related Content
In the meantime, it will cancel some existing co-operation, including code-sharing on overlapping routes, which it says will highlight to authorities the benefits of the airlines working together.
"It will mean people will not get the same status credits as they got on American Airlines aircraft, because we don't do that with any other carrier on routes without a joint venture," Mr Joyce said.
"So consumers lose out. We just need to go and make that very clear to the DoT, and that's the main case we'll be making: customer benefits that are associated with the alliance," he said. "This time around, we'll have a very strong case."
The airlines will maintain codeshare and loyalty scheme reciprocity on routes that do not overlap.
The DoT granted anti-competition immunity for joint ventures to Virgin Australia and Delta as well as Air New Zealand and United, but, in a tentative decision, would not accept Qantas and American controlling 60 per cent of the Australia-US market.
"We have bigger market share on other routes and there's still high levels of competition on those," said Mr Joyce, adding the initial coordination between the airlines had broken United's monopoly on the Sydney to San Francisco route and Air New Zealand's on Auckland to LA.
Mr Joyce made the comments while officially opening Qantas' new maintenance hangar at Los Angeles International Airport - a $US30 million ($40 million) investment in its growing trans-Pacific operation.
At 5.7 hectares and with a crew of 90 engineers, the largest commercial hangar in North America can service as many as four A380s or Boeing 747s at once, and will cut maintenance times by about 20 per cent, said Qantas International CEO Gareth Evans.
Mr Evans said conducting maintenance during long layovers would improve on-time performance out of Los Angeles, and had already freed up aircraft to fly direct from Australia to Dallas, Texas.
Mr Joyce said there was no material cost savings on wages by carrying out more maintenance in LA, but that Qantas could earn millions of dollars every year by renting the new hangar to other airlines.
Mayor of Los Angeles Eric Garcetti welcomed the investment in his city and its much-maligned airport.
"We want to see Australian investment in America, we want to see American investment in Australia, we want to see tourists go both ways," Mr Garcetti said.
The reporter travelled to Los Angeles as a guest of Qantas