Hot off the press. American Airlines and Qantas have filed a joint venture application with the US Department of Transportation. This joint venture will allow the two airlines to better serve customers flying between North America and Australia and New Zealand. They are suggesting that the joint venture will unlock more than $300 million in consumer benefits… which is usually corporate-speak for increased revenue and profits for the combined company. The American Airlines-Qantas joint venture application is still pending, but it will be interesting to see what the blogosphere and the traditional media have to say about this tomorrow.
Editors note: – I misread the press release and noted it as a merger instead of a joint venture. I’ve since corrected the post.
- American Airlines First Class 777-300ER LAX to HKG
- American Airlines Business Class A330: Charlotte to Barcelona
- 8 surprising airline fees you’d better know… and how to avoid them!
American Airlines-Qantas Joint Venture Application Benefits
Of the $300 million in joint venture benefits, American Airlines and Qantas are suggesting they would break down like this according to the press release:
- Up to $221 million in value from expanding codesharing between American and Qantas – opening more connections to more destinations.
- Up to $89 million in value by offering a wider range of fare classes across each other’s networks, including lower fares and discounts.
What they are really saying is that the company could expect an additional $300 million in revenue opportunities for the combined airline by offering more flights and more fare classes to more destinations, which would lead customers to buy from them instead of other airlines.
They are suggesting that the joint venture will stimulate demand for an additional 180,000 new trips between the US and Australia and New Zealand every year. They better be lowering prices in a major way for that to occur!
The press release indicates that they will improve airport lounges, offer more frequent flyer benefits, and invest in other infrastructure (ie: baggage systems). We’ll see about that.
You can probably feel my sense of sarcasm. Mergers and joint ventures are generally best for executives and shareholders, while customers and employees often are shortchanged.
The Bald Thoughts
It is still very early and more details will surface soon. In the meantime, check out the fact sheet that American Airlines and Qantas published. I just hope that this will increase the award availability so I can use some AAdvantage miles to return to Australia or finally make it to New Zealand.
What do you think about the American Airlines-Qantas joint venture application? Does this make you want to fly either airline more as a combined company than if they were separate? Share your thoughts in the comment section below.
Thinking of getting a new credit card?
To see the best credit card offers available, go to our credit card marketplace to find your next card.