Before the end of the Obama administration, the Department of Transportation rejected American Airlines’ application to expand its antitrust-immunized joint venture with Qantas, arguing that it would harm competition, even though Australia and New Zealand authorities had already signed off
The DOT argued that American and Qantas weren’t growing service more than they’d expect to happen anyway. There’s no consumer benefit to the arrangement — and thus they refused to approve it — if they didn’t expect more flights to result.
Instead of letting the DOT actually reject the application, they withdrew it, deciding to wait for the Trump administration and a new Secretary of Transportation to resubmit. Now Qantas has brought on lobbyists to work the case.
And American is making a bunch of changes that sure look like they want to show the Department of Transportation that they won’t offer as many seats across the Pacific, or give customers as many miles, without approval of the joint venture.
- American Airlines is reducing capacity Los Angeles – Sydney, replacing their Boeing 777-300ER with a smaller Boeing 787-9. Fewer seats, fewer business class seats, and no first class. Oddly this happens in November, just as traffic on the route should be picking up.
Boeing 787-9 Business Class - They’re suspending Los Angeles – Auckland for 8 weeks ending in October. The flight will be back for high season as a Boeing 787-9 (it’s currently operated by a Boeing 787-8).
Boeing 787-9 - And they’re reducing AAdvantage mileage earning for flights on Qantas.
- Premium economy R and T fares will no longer earn more than one mile per mile flown while elite qualifying dollars earned are being shaved back from 22% of miles flown to 20% on these fares.
- In economy, H fares drop from 100% to 50% mileage earning (and qualifying dollars cut from 20% to 10%)
- N, G, and S fares in economy drop from 50% to earning just 25% of miles flown (with qualifying dollars cut from 10% to 5%).
This sure reduces the incentive for American customers to fly on Qantas. Meanwhile, Qantas is doing something similar to their own Frequent Flyer program for travel on American.
- Premium economy R and T fares will no longer earn more than one mile per mile flown while elite qualifying dollars earned are being shaved back from 22% of miles flown to 20% on these fares.
These changes may make operational sense, the truth is that American probably can’t support as much capacity without close cooperation with Qantas. And to make the point they’re showing they can’t even fly to Auckland year round.
The ONLY good thing I see with this move is that American will have Premium Economy by using the 787-9 to Sydney. We flew to Australia about 6 months ago and specifically chose Qantas because we wanted Premium Economy as opposed to MCE.
The other changes are detrimental to passengers. I hope the joint venture application will be approved before our next trip to Australia.
The Joint Venture between American and LATAM has demonstrated how pro-consumer these arrangements can be — not pro-consumer at all. Since the JV was put in place, fares have roughly trebled, resulting in $2000 economy fares between JFK and GIG. Consumers have gotten royally screwed.
Whatever plane they use I sure hope they improve the food. It has been terrible on their pacific flights even in first and business.
I sure wouldn’t be counting on any improvement in catering at this juncture
Gary where’s your citation that these were to make a point to the DOT?
If united, with a fully immunized joint venture with Air New Zealand, which has all the point of sale strength in New Zealand, can’t make AKL work year round, I doubt AA could, especially without the support. NZ is a small market, and without any point of sale strength / help in New Zealand during the weak season there’s no way anybody can make it work except for the local carrier. Sorry, don’t see that part as making a point to the DOT. If anything, it shows it’s a small weak market.
Does this also mean a downgrad for the 77w Mia-lax?
Am currently booked SYD-LAX for two in business mid Nov. This is going to be the first time flying AA biz period for my wife and I and we are really looking forward to it as we’ve just broken into the miles game. How should we look to handle change? Is the business product significantly different between the 787-9 and the 77w? Thanks for any insight!
The AA site is still showing the 777 ER for December and beyond LAX to SYD. Haven’t flown on the 787-9…sure hope they don’t have the Zodiac seats as we had those on AA ORD to NRT in Business this past November. (Took way too long to try to second guess which seats would be the most comfortable with less shaking.)