Qantas and American Airlines are trying again for approval for a joint venture which they say will lead to cheaper flights across the Pacific, benefiting all passengers, including New Zealanders.

The two airlines say that without approval, American Airlines may have to further reduce services between Los Angeles and Auckland, seen by the travel industry as a crucial non-stop route to keep fares down on the route between New Zealand and the United States.

The new application with the US Department of Transportation (DOT) says its success would significantly improve service, stimulate demand and provide more than US$300 million ($410m) a year in consumer benefits that are not achievable through any other form of cooperation.

''The joint business will also give American and Qantas the opportunity to launch additional routes between the US and Australia and New Zealand, including new flights to city pairs currently not served by either carrier.''


An expanded relationship will encourage significant improvements in the overall customer experience, including more improved frequent flyer benefits and investments in lounges, baggage systems and other infrastructure designed to better serve the carriers' joint customers.

These would stimulate significant demand for new travel – generating up to 180,000 new trips between the US and Australia and New Zealand every year.

The applicants emphasise already strong competition across the Pacific including that from Air New Zealand which has targeted Australia as a source of passengers to fly through Auckland.

''In fact Air New Zealand now flies the equivalent of a 777-worth of passengers a day from Australia to North America which is significantly more than the number American flies between Australia and North America.''

In 2016 the DOT knocked back an application to extend a deal which the airlines said then didn't take into account precedent, intense competition on the transpacifc route and the benefits of a closer relationship between the two carriers.

Since then co-operation between the airlines has, by economic necessity, retrenched, they say in today's application.

''American has been forced to downgrade its service to Australia and New Zealand, and the parties have stopped code sharing on flights between the United States and Sydney.''

Without approval for the deal, existing cooperation will at best stagnate or, more likely, continue to deteriorate.


The volume of US point-of-sale passengers on American's flight to Auckland drops significantly during winter in the Southern Hemisphere,

''And this fall off makes service on this route not viable without the close cooperation of an Australasian partner.

Approval for the application would ''facilitate'' American restoring its New Zealand service to year-round.

Daily Auckland-Los Angeles services began in 2016 but quickly dropped from year-round to seasonal, suspending the service for an eight-week period across August and October.

American and Qantas have cooperated on services between the United States and Australasia for decades, but their relationship has never extended to revenue-pooling, which has limited their willingness and ability to cooperate and caused them to miss opportunities for significant efficiencies, the application says.

The airlines say deeper integration through a joint venture would enable them to better compete with the two rival alliances that the department had given anti-trust immunity; United Airlines and Air New Zealand out of Auckland and Delta and Virgin Australia from Australia.