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 operate flights. 

"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 said. 

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, he said.  

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 impact. 

Parties have until June 17 to file objections to the tentative approval.

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