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American, Qantas Expand Trans-Pacific Operations

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American, Qantas Expand Trans-Pacific Operations

American, Qantas Expand Trans-Pacific Operations
June 09
16:08 2015

MIAMI —  Oneworld partners American Airlines and Qantas used the closing of this year’s IATA Annual General Meeting as an opportunity to announce a significant expansion of the pair’s trans-Pacific service.

American Air CEO Doug Parker and Qantas CEO Alan Joyce at a press conference announcing new trans-Pacific service. (Credits: Roberto Leiro)

American Air CEO Doug Parker and Qantas CEO Alan Joyce at a press conference announcing new trans-Pacific service. (Credits: Roberto Leiro)

American Airlines is returning to Australia after a decades-long absence, launching service on the competitive Los Angeles-Sydney route in December 2015 with a Boeing 777-300ER. Qantas will also be adding service, restoring its Sydney-San Francisco route. The new services will see a transition of the partnership between the two carriers. The four-year-old joint venture will, pending government approval, become a route revenue-share agreement, a move which takes into account the fact that American Airlines will now be operating some of the flights.

The announcement of new trans-Pacific service via American Airlines and Qantas. (Credits: Roberto Leiro)

The announcement of new trans-Pacific service via American Airlines and Qantas. (Credits: Roberto Leiro)

For American Airlines, this is a significant expansion into a market that has long been lacking. CEO Doug Parker acknowledged as much in the statement announcing the new service. “Our customers have asked us to expand to important business destinations across the Pacific, and flying our flagship aircraft, the Boeing 777-300ER, to Sydney will provide another world-class travel experience from our key gateway at LAX,” he said in the statement.

Qantas will reduce its five weekly Boeing 747 frequencies into Los Angeles from Australia — four from Sydney and one from Brisbane. These reductions will be used to free up the aircraft to work the Sydney-San Francisco route. In total, the pair will have eight additional weekly flights across the Pacific once the full schedule is implemented.

This sort of coordination in capacity and service is the goal of the joint ventures and key to their financial success. By working together on capacity planning and pricing, the two carriers can ensure that growth such as this occurs in a measured and profitable manner. And in the LA-Sydney market, where there is already significant capacity and many competitors, such measured growth is critical to profitable expansion.

An American Airlines timetable covering the inauguration of its first overseas routes in 1970, 707 service to the South Pacific.

An American Airlines timetable covering the inauguration of its first overseas routes in 1970, 707 service to the South Pacific.

American Airlines previously served Australia with flights via Hawaii, but that service has not operated in decades. Adding it back to the route map is a bit of a prestige move for what is now the world’s largest airline. It is also the first of what are expected to be several moves by the company to expand service across the Pacific Ocean from the Los Angeles hub, a move Parker has previously alluded to.

For Qantas the return to northern California fills a void created in 2011 when the Sydney-based carrier cut the route amidst a soft economy and financial instability for the carrier in general. It also coincided with the launch of the joint-venture relationship which has helped to stabilize traffic and yields for the two carriers and grow back into the market.

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Seth Miller

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