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LAXintl
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American - Qantas File For ATI JV

Wed Jun 10, 2015 5:20 pm

As follow on to yesterdays route announcements, American Airlines and Qantas Airways have jointly filed with the DOT approval of antitrust immunity and formation of an integrated alliance.

Carriers say they seek to build upon their 2011 joint business agreement by entering into a broader partnership that would increase capacity between the nations and allow the carriers to jointly coordinate activities via a metal-neutral alliance structure.


OST-2015-TBA

=

No surprise, the applicants are asking the department to expedite the approval process. These ATI JV reviews can take a little time especially if other carriers object.


I found one chart interesting. If approved the US-AU/NZ market share by JV would be as follow based on 2014 enplanements.

AA/QF - 35.6%
DL/VA - 17.3%
UA/NZ - 31.6%
other - 15.4% (TN, FJ, HA, etc)
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commavia
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RE: American - Qantas File For ATI JV

Wed Jun 10, 2015 5:41 pm

Quoting LAXintl (Thread starter):
I found one chart interesting. If approved the US-AU/NZ market share by JV would be as follow based on 2014 enplanements.

AA/QF - 35.6%
DL/VA - 17.3%
UA/NZ - 31.6%
other - 15.4% (TN, FJ, HA, etc)

I, too, found that interesting, although of course the inclusion of New Zealand heavily skews the numbers towards United/Air NZ, and thus makes AA/QANTAS look better. The AA/QANTAS seat share of U.S.-Australia specifically is well north of 36%, and of course the United/Air NZ share of nonstop seats U.S.-New Zealand is currently 100%.
 
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LAXintl
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RE: American - Qantas File For ATI JV

Wed Jun 10, 2015 5:55 pm

If one looks solely at the competitive nonstop LAX-SYD segment shares are as follows based on 2014 numbers:

AA/QF - 47%
DL/VA - 36%
UA/NZ - 17%
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ridgid727
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RE: American - Qantas File For ATI JV

Wed Jun 10, 2015 6:21 pm

Quoting LAXintl (Thread starter):
No surprise, the applicants are asking the department to expedite the approval process. These ATI JV reviews can take a little time especially if other carriers object.

Im sure DL will go a$$ over Tea Kettle to get their objection in, but in the end it will more than likely be approved.
 
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RE: American - Qantas File For ATI JV

Wed Jun 10, 2015 6:23 pm

Quoting LAXintl (Thread starter):

I found one chart interesting. If approved the US-AU/NZ market share by JV would be as follow based on 2014 enplanements.

AA/QF - 35.6%
DL/VA - 17.3%
UA/NZ - 31.6%
other - 15.4% (TN, FJ, HA, etc)

This is such a snakes-oil salesmen kind of number. UA-NZ is *not* in a JV/JBA, and they're showing old 2014 numbers without accounting for new QF SYD-SFO and new AA SYD-LAX, which would quite substantially raise the AA/QF numbers come Jan'16.
 
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RE: American - Qantas File For ATI JV

Wed Jun 10, 2015 11:02 pm

Dont some of these ATI JVs take almost 1-year to get approved? I suppose they must also apply to Australia and any other 3rd nations (New Zealand?) that will be covered as well.
mercure f-wtcc
 
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LAXintl
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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 12:03 am

Yes they can take sometime. For example the DL-VA ATI took 14-months for tentative approval which was appealed and then took additional 9 months for a total of 23-months for the final decision to come out.

Probably the most recent ATI JV - between DL and VS was rather fast at 5.5months.

Likely case, suppose AA-QF will just have to start the new services without receipt of the ATI approval and consolidate ops at a later stage when the approval is granted.

[Edited 2015-06-10 17:05:53]
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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 1:32 am

Quoting ridgid727 (Reply 3):
Im sure DL will go a$$ over Tea Kettle to get their objection in, but in the end it will more than likely be approved.

My thoughts exactly and without a doubt it will receive approval considering DL/VA received approval.

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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 4:26 am

Quoting ridgid727 (Reply 3):
Im sure DL will go a$$ over Tea Kettle to get their objection in

Why would DL bother, and risk potential review of its own ATI/JV?
I myself, suspect a more prosaic motive... ~Thranduil
 
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EK413
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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 4:44 am

Quoting LAX772LR (Reply 8):
Quoting ridgid727 (Reply 3):
Im sure DL will go a$$ over Tea Kettle to get their objection in

Why would DL bother, and risk potential review of its own ATI/JV?

The way I read iit DL will react in some way or form, it's second nature.

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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 4:59 am

Quoting EK413 (Reply 9):
The way I read iit DL will react in some way or form, it's second nature.

There's a pretty significant difference in strategy between adjusting capacity/routes/fleet/prices/etc vs whining to government, as that statement seems to imply.

I have little doubt that DL/VA will do the former. And while nothing precludes them from doing both, I'm not so sure about the latter. Hence the question.
I myself, suspect a more prosaic motive... ~Thranduil
 
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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 12:20 pm

Quoting LAX772LR (Reply 10):
whining to government, as that statement seems to imply.

Apparently you're not familiar with the DL resident attorneys.
 
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LAXintl
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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 7:20 pm

Whether DL has a valid point or not, it does them no harm in trying to slow their competitor down proceduraly.
After all AA was principal the one that that slows the DL-VA alliance and dragged the process out nearly 2-years.
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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 7:55 pm

Quoting LAXintl (Reply 12):
Whether DL has a valid point or not, it does them no harm in trying to slow their competitor down proceduraly.
After all AA was principal the one that that slows the DL-VA alliance and dragged the process out nearly 2-years.

While each airline would lead you to believe they are Butterflies operating joyfully amongst their peers, Each Airline has its own pen of pitbulls out to snap tear up and cannibalize their competitor. These staff attorneys are relentless with competitors and will do anything at their disposal to delay or stop something from happening at the GO in DFW, ORD, DAL, SEA, ATL. or NYC
 
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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 7:56 pm

Quoting jetblue1965 (Reply 4):
This is such a snakes-oil salesmen kind of number. UA-NZ is *not* in a JV/JBA, and they're showing old 2014 numbers without accounting for new QF SYD-SFO and new AA SYD-LAX, which would quite substantially raise the AA/QF numbers come Jan'16.

It also will not account for the new AKL-IAH 5x weekly service on NZ from December, also mostly the the additional NZ services on AKL-SFO. NZ has added a couple of extra weekly services on top of the daily AKL-SFO service.

Quoting mercure1 (Reply 5):

Dont some of these ATI JVs take almost 1-year to get approved? I suppose they must also apply to Australia and any other 3rd nations (New Zealand?) that will be covered as well.

Knowing NZ they will fight it all the way to the end, they did an good job at getting the QF/EK joint venture delayed for the Tasman.

Quoting LAXintl (Reply 2):

AA/QF - 47%
DL/VA - 36%
UA/NZ - 17%

That DL/VA partnership could get messy in the years to come, with VA currently owned 26% by NZ (which seems to grow by 3-6% every year). If NZ was to grow to an larger shareholder in VA, they could want there share of the market from VA etc, they already have an seat on the VA Board. Then you're got another 24% by SQ and around the same by EH. All 3 airline owners now have an seat on the board at VA.
 
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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 8:17 pm

Quoting zkncj (Reply 14):

I agree ...if NZ decides to JV with UA, it would put their ownership of VA in an awkward position

But seriously I have no idea what VA wants to be anymore ... They put a premium carrier facade but still engage in LCC level nickel and diming
 
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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 8:34 pm

Quoting zkncj (Reply 14):
That DL/VA partnership could get messy in the years to come, with VA currently owned 26% by NZ

Again, the VA International is NOT owned 26% by Air NZ!! VAs international operations is a separate company owned mainly by Australian financial institutions. As NZ, SQ & EY are NOT Australian companies they cannot own or control the majority of shares in an Australian designated international airline. This is exactly the same dodge Ansett used to start international operations.

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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 8:35 pm

Quoting zkncj (Reply 14):
Knowing NZ they will fight it all the way to the end, they did an good job at getting the QF/EK joint venture delayed for the Tasman.

NZ will have no say in this, as it is the US DOT that will be prosecuting it. On the other hand they could have a big say with what UA does if they file objections.
 
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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 8:41 pm

Quoting ridgid727 (Reply 17):
NZ will have no say in this, as it is the US DOT that will be prosecuting it.

Actually there are two authorities, at least involved in giving authority for this JV. The US DOT, Australia's ACCC and, if the JV involves services to NZ the relevant NZ Commission (I forget its name!). So NZ will have at least three arenas to fight this in!

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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 8:46 pm

Quoting gemuser (Reply 18):
So NZ will have at least three arenas to fight this in!

My statement pertains to the US DOT, which those in NZ and AU prosecute on their own terms.
 
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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 9:01 pm

Quoting gemuser (Reply 16):
Again, the VA International is NOT owned 26% by Air NZ!! VAs international operations is a separate company owned mainly by Australian financial institutions. As NZ, SQ & EY are NOT Australian companies they cannot own or control the majority of shares in an Australian designated international airline. This is exactly the same dodge Ansett used to start international operations.

VA International is simply an holding company in reality, keeps things legal.


Not to forget that NZ has rights to fly Intentional Services ex-Australia, and has done in the past e.g. SYD-LAX.
Longer term if VA had problems with running it's USA services due to ownership, there is nothing stopping them for getting NZ to operate the the services on there be-half and market them as VA. Moving the VA 77Ws to the NZ fleet wouldn't be to hard as they already have an 777AOC
 
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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 9:03 pm

Quoting ridgid727 (Reply 11):
Apparently you're not familiar with the DL resident attorneys.

Quite familiar... which is why I'm asking the question. DL has no qualms about crying to big government when they have nothing to lose. It's a different matter when what they're complaining about can come back to haunt them.

About the only exception was the 2nd ATI application for AA/BA, which is understandable, as DL would've still been effectively locked out of LHR at that time.
I myself, suspect a more prosaic motive... ~Thranduil
 
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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 11:25 pm

Quoting zkncj (Reply 20):
VA International is simply an holding company in reality, keeps things legal.

True, but it is NOT controlled by NZ, SQ & EY. It can not be, so this changes the background to your speculation.

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RE: American - Qantas File For ATI JV

Thu Jun 11, 2015 11:58 pm

Quoting gemuser (Reply 18):
Actually there are two authorities, at least involved in giving authority for this JV. The US DOT, Australia's ACCC and, if the JV involves services to NZ the relevant NZ Commission (I forget its name!). So NZ will have at least three arenas to fight this in!

It is the Minister of Transport over here, although the Commerce Commission also has a role (I think).

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LAXintl
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RE: American - Qantas File For ATI JV

Tue Jun 23, 2015 12:12 am

Well JetBlue is out with a bit of an opposition the ATI request.

B6 suggest the DOT apply a litmus test to the JV to ensure consumer benefits described in the Joint Application have been realized.

To do this, B6 proposes that if the DOT decides to grant the ATI, it should only be limited to a three year period.
This time frame is the the same which American and others are trying apply in their complaint to the DOT about state-owned airlines, and similar to a proposal in Congress that would require DOT to perform periodic review to ensure ongoing US consumer benefit from ATI and open-skies agreements.
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luv2cattlecall
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RE: American - Qantas File For ATI JV

Tue Jun 23, 2015 7:42 am

What possible benefit could there be for B6 to get involved in this? How would an approval affect them in any way?
.
 
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LAXintl
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RE: American - Qantas File For ATI JV

Mon Jul 06, 2015 7:26 pm

From a daily e-mail news brief I receive.

I suppose the 'government authority' they mention must be on the Australia end as I have not see anything submitted to US DOT.


Air New Zealand asked governmental authorities to delay planned coordinated increase in capacity by Qantas (Australia) and American Airlines (US) on trans-Pacific routes planned for peak season starting December 2015 as their joint application for approval and antitrust immunity alliance remains under review.
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commavia
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RE: American - Qantas File For ATI JV

Mon Jul 06, 2015 7:42 pm

Quoting LAXintl (Reply 26):
I suppose the 'government authority' they mention must be on the Australia end as I have not see anything submitted to US DOT.

Indeed - all available here:

http://registers.accc.gov.au/content/index.phtml/itemId/1187050/fromItemId/278039/display/submission
 
commavia
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RE: American - Qantas File For ATI JV

Wed Jul 08, 2015 11:53 am

Two related notes on this subject ...

First, the government of Australia - the Department of Intrastructure and Regional Development, specifically - has submitted a comment to the Australia competition regulator, the ACCC, in support of the bid for an expanded alliance between the two carriers: "The Infrastructure Department notes that while Qantas already has the largest share of the market between the two countries - accounting for nearly half the passenger total in 2014 - considerable nonstop competition already exists [and] deepening the Qantas-American relationship will mean 'enhanced sustainability' for Qantas’s services, while also supporting the new flights by both carriers 'which would otherwise be unlikely to be commercially viable.'" Aviation Week characterizes this as a "big boost" for the application.

Second, QANTAS and AA have filed a response to Air New Zealand's submission, essentially contesting and criticizing each of Air New Zealand's stated objections to the application. Among other things, QANTAS and AA dispute that they have waited too long to apply and left too little time for regulatory review, that AA's new LAX-SYD flight can be commercially viable if launched outside the JV, and that there is "no compelling case for the launch of the new services in December." In essence, as has already been suggested elsewhere, QANTAS and AA imply that Air New Zealand is attempting to slow down the QANTAS-AA alliance in order to slow an influx of new competitive capacity - particularly during peak season - and as such, "Air New Zealand’s stated concerns must be viewed in the context of the strategic advantage it would enjoy from delaying or diluting the success of the [QANTAS-AA JV]."
 
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RE: American - Qantas File For ATI JV

Wed Jul 08, 2015 9:49 pm

Quoting EK413 (Reply 7):
My thoughts exactly and without a doubt it will receive approval considering DL/VA received approval.

Maybe not, considering that the DOJ is now accusing airlines of colluding.

Quoting LAX772LR (Reply 8):
Why would DL bother, and risk potential review of its own ATI/JV?

   Protesting could backfire on them.
 
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mariner
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RE: American - Qantas File For ATI JV

Wed Jul 08, 2015 10:20 pm

Quoting commavia (Reply 28):
In essence, as has already been suggested elsewhere, QANTAS and AA imply that Air New Zealand is attempting to slow down the QANTAS-AA alliance in order to slow an influx of new competitive capacity - particularly during peak season - and as such, "Air New Zealand’s stated concerns must be viewed in the context of the strategic advantage it would enjoy from delaying or diluting the success of the [QANTAS-AA JV]."

I think that's probably right.

Air NZ's submission isn't much more than a token, seeking to delay rather than prevent. But - they gotta try.

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RE: American - Qantas File For ATI JV

Wed Jul 08, 2015 11:56 pm

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