The Department of Transportation has tentatively approved
the joint venture application of American Airlines and Qantas, reversing a
decision it made during the waning weeks of the Obama administration in 2016.
Final approval of the application would give the carriers
antitrust immunity, thereby authorizing them to jointly schedule, market and
"Our analysis below tentatively finds that substantial
public benefits are likely to result from the proposed immunized cooperation,
and that the benefits can only be achieved with a grant of antitrust immunity,"
Joel Szabat, the DOT's assistant secretary of aviation and international
affairs, wrote in the June 3 decision. "These benefits are likely to
include additional seat capacity and the retention and expansion of current
flights and codeshares."
In a statement about the tentative decision, American said
the joint venture would lead to new routes. Qantas expects to announce service
from Brisbane to Chicago and San Francisco once the approval is finalized, AA
The DOT rejected the previous American-Qantas joint venture
application in November 2016, saying that the combination would control too
much of the U.S.-Australia marketplace and therefore reduce competition.
Delta-Virgin Australia and United-Air New Zealand already
operate joint ventures in the U.S.-Australasia market.
Qantas and American resubmitted their application last year,
this time to the Trump administration's DOT. In Monday's tentative decision,
Szabat wrote that market conditions have evolved enough since 2016 to mitigate
any harm an American-Qantas joint venture would cause. The carrier's combined
U.S.-Australia nonstop capacity has dropped from 59% to 54% during that time,
As a condition of the approval, the DOT will require the two
carriers to conduct a self-assessment every seven years of the joint venture's
Parties have until June 17 to file objections to the