American Airlines and Qantas Can Launch Their Long-Sought Partnership

American Airlines and Qantas Airways have received the green light for their long-sought partnership across the Pacific, paving the way for easier travel across their joint networks.

The US Department of Transportation signed off the joint venture on July 19, nearly two months after giving its tentative approval. The airlines will be able to act as essentially one between the U.S. and Australia and New Zealand under the pact, which allows them to jointly coordinate everything from schedules to fares and sales.

"We now have the opportunity to launch new routes and provide enhanced service with better schedules, additional frequent flyer benefits and continued investments in the overall customer experience," says Doug Parker, chairman and CEO of Fort Worth, Texas-based American, in a statement.

Qantas plans to add new service to Chicago O'Hare (ORD) and San Francisco (SFO) from Brisbane (BNE) under its new partnership with American. The airlines promised to launch at least three new routes if the pact was approved.

Sydney-based Qantas calls the two new routes its "first order of business" under the joint venture. Flights on Boeing 787-9 aircraft will begin by the end of April 2020.

Qantas and American together control a nearly 39% share of seats between the U.S. and Australia and New Zealand in 2019, according to Diio by Cirium schedules. This is the largest combined share followed by Air New Zealand and United Airlines with 34% of seats, and the Delta Air Lines and Virgin Australia with 15%.

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Air New Zealand and United, as well as Delta and Virgin Australia already operate immunized joint ventures in the market.

The DOT's approval does not come without conditions. The partnership will be reviewed annually and will be re-evaluated every seven years. In addition, the regulator bars each airline from an exclusive relationship requiring they interline with new entrants between the U.S. and both Australia and New Zealand.

However, the conditions required are not nearly as strict as those placed on American and Qantas' first proposed tie up. The carriers dropped those plans, which they applied for in 2015, in late 2016 citing onerous conditions required by the regulator.

Neither American nor Qantas have said when they expect to implement the joint venture. However, such tie ups typically take several months after regulatory approval to implement.