The U.S. Department of Transportation today issued a Show Cause Order tentatively denying the application of American Airlines, Inc. and Qantas Airways, Ltd. to expand their existing alliance for services between the United States and Australia/New Zealand.
In reaching its tentative decision, DOT analyzed traffic data, passenger bookings, and other evidence submitted in the record of the case. Based on its analysis, DOT tentatively found that the expanded alliance would create a potentially anticompetitive environment given the scale of the resulting joint business, which would account for approximately 60% of seats between the U.S. and Australia. DOT also noted that consumers would have few remaining competitive options because the U.S.-Australia/New Zealand markets are not well served by alternative routings over third countries.
Comments and objections on this tentative decision can be submitted to DOT within 14 calendar days of the service date of the Show Cause Order (i.e., December 2, 2016). Replies to any objections must be filed within seven business days from that date (i.e., December 13, 2016). The case can be found on regulations.gov at Docket DOT-OST-2015-0129.
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