Qantas, Cathay Pacific, American wrap up the Pacific for OneWorld

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In the last week, Qantas and American Airlines, both key members of the OneWorld alliance, were authorised to create yet another immunised joint venture for travel offered by both of them across the Pacific.

Yesterday, Cathay Pacific, bowing to years of pressure and near hostility to working with Qantas, coupled to its own need to expand its business, reached a deep ranging code share arrangement with Qantas.

The Trans-Pacific market to the United States to and from Australia is hardly well served by a multitude of airlines. weekly connections are absurdly low because of Qantas dominance before the JV, never mind after.

There is little competition in the first place, now there is in effect, virtually none worth speaking about.

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Qantas and American will share the sale of tickets as though the other airline was Qantas or American depending on the availability of flights for that destination.

While the benefits are that Qantas passengers or American passengers can book across both airlines routes at a single point of booking – something that could have been done through simple code sharing, this unifies their businesses and allows them to share income and profit from cross-selling on each others websites.

One of the things these JV do is reduce the visibility of the operating airline during the booking process. Many force you to have to physically go through at least one or more hyperlinks to find out who you’re really flying with and US airlines have few limitations on how hidden that information is.

This creates an extraordinarily dominant pairing, Qantas has a huge market share into the US which will only grow as Project Sunrise comes to fruition with Ultra Long Range Aircraft.

The key here is the future. Virgin Australia with Delta barely get past a flight a day to LAX, none of them seriously operate deep into the US. Hawaiian Airlines is mostly irrelevant here because it operates to the islands not the mainland.

Part of the problem with Qantas has been its difficultly in onward flying through the US and American’s problem delivering through-traffic to Australia. That problem is now solved, and it puts them way ahead of every other airline, especially United.

By the time you create the multiple links between Qantas, American, British Airways and the other Oneworld members, it effectively cements Qantas into a dominating role that’s simply unrivalled. And dominance leads to controlled prices, less competition. Nobody else can offer what Qantas/American can.

While the airlines easily convince authorities that these joint ventures are in the public interest, the general lack of knowledge in the certifying agencies as to what it all really means, and their persuadability by lobbyists working for the industry masks long term facts, especially when they don’t know what questions to ask, or are encouraged to avoid.

 

 

 

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