Qantas and American Airlines to fight decision to block flight deal

Qantas and American Airlines will fight a US transport regulator's decision to tentatively block an expansion of the pair's alliance which would have seen them fly more between Australia and the United States. The Flying Kangaroo and the US airline struck a deal in mid-2015 for Qantas to fly between Sydney and San Francisco and for American to fly between Sydney and Los Angeles, connecting to a network of destinations on either end, in a tie-up that was to open doors to new markets for both. But the US DoT issued a show cause order on Friday tentatively denying the airlines' application to expand their alliance because it could result in an unfair concentration of market power. If the deal was allowed to go ahead, Qantas and American would control about 60 per cent of traffic between the US and Australia, the DoT said in its decision, noting that consumers would have few other competitive options on the under-serviced route. American has pledged to fight the decision, which it said was "a significant departure from prior DoT decisions, which have long recognised the pro-competitive benefits of combining complementary international networks." "Other airlines have the significant competitive advantage of antitrust immunity in the US-Australasia market. With the same opportunity, American and Qantas will be able to compete more effectively and increase consumer benefits in the market," American said.<br/>