Qantas Introducing Melbourne – San Francisco Service, Will That Undermine Their American Airlines Joint Venture?

Two years ago American Airlines and Qantas announced an expanded joint venture. American was launching Sydney and Auckland service, Qantas Sydney – San Francisco. And they indicated there would be more new routes in the offing as a result of the partnership.

The Obama administration’s Department of Transportation indicated they were going to reject anti-trust immunity for the revenue-sharing partnership. They said they didn’t believe there would be greater growth in service compared to what they expected to happen anyway which was a novel approach. Qantas and American withdrew their application, though they’ve been expected to re-introduce it soon under the Trump administration’s DOT which should be more amenable.

Qantas today has announced new Melbourne – San Francisco service with a Boeing 787, although we don’t yet have a launch date beyond “late 2018.” It appears that some of Qantas’ current 13 weekly Los Angeles flights will shift to San Francisco rather than offering all new service, or entirely net new service.

Qantas in Melbourne

This move surprises me because it front runs any renewed application for a new joint venture with American, and raises the bar for how much service and what new routes would be offered in the absence of such a deal (even if the total number of flights doesn’t grow). Perhaps it won’t matter under a new Department of Transportation, or perhaps it signals Qantas’ willingness to move forward independent of whether or not such an agreement eventually comes to fruition.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. AA downgraded LAX-SYD to a 789 from a 773. I question whether AA should be in the market at all.

    Seems to me, QF is just adding MEL-SFO to complement its SYD-SFO. There have staff at SFO already. Seems logical to me. AA doesn’t fly long haul flights into SFO.

  2. In theory, with a JV, AA could takeover some of the flying from their own hub (like expanding ex-LAX flying), freeing up aircraft on the QF side to launch routes like…drumroll…MEL-SFO.

    QF announcing this route does seem to contradict the original BS spewed by AA and QF that the only way any expansion of flying was commercially viable was via a JV.

  3. “Seems to me, QF is just adding MEL-SFO to complement its SYD-SFO. There have staff at SFO already. Seems logical to me.”

    For mine it is refreshing to see QF fly out of Melbourne at all. Many international flights have been going via Sydney or substituted the low cost Jetstar. The former is also terrible as it means an extra hour flight plus transfer from domestic to international in Sydney. In both cases it has meant that I have refused to fly out of Oz on QF at all…. plus of course SQ is such a delight and who I have been flying almost exclusively out of Melbourne.

  4. Gary – you buried the lede here: where does Alaska fit in all this ??? Seems like a critical variable – a combined AS/Virgin hub at SFO – was absolutely in play here on this decision. But how ? And who wins/loses ?

  5. You also didn’t touch on the other $64,000 question besides where AS fits in all this…What’s UA going to do? QF just peed in their SFO Asia/South Pacific Gateway Fortress Hub’s pool.

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