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American Airlines and Qantas gain approval to form joint venture

The two airlines will coordinate flight pricing, sales and frequent flyer programs.

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American says it now has "the opportunity to launch new routes and provide enhanced service with better schedules." 

American Airlines

American Airlines and Qantas have gained approval to form a joint venture from the US government. The Department of Transportation on Friday authorized the joint venture to coordinate their flight plans and pricing, frequent flyer programs and sales, Reuters reported earlier.

The two airlines are already both part of the OneWorld Alliance, which means Qantas members can earn frequent flyer points on American flights and vice versa. The joint venture would allow for better coordination, extra capacity on existing flights and three new flight routes in the next two years, according to Reuters.

The Transportation Department confirmed the approval to CNET, saying the final OK follows the draft decision in June. It would benefit consumers by providing more flights and more seats, the department said in a statement.

"The carriers are now expected to begin coordinating their planning, pricing, sales and frequent flyer activities to offer customers a single proposition on trans-Pacific flights, with new options and customer service enhancements," the Transportation Department said Friday. It added that American Airlines and Qantas are to report annually on the partnership.

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American Airlines welcomed the decision, saying they'll "offer more products that will better serve customers flying between the United States and Australia and New Zealand."

"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," said Doug Parker, CEO of American. 

Qantas added the agreement would mean reduced travel time and lower fares, as well as more routes -- beginning with direct flights from Brisbane, Australia, to San Francisco and Chicago. These new routes will operate on the Dreamliner aircraft, to launch by April 2020, and will "add more than 170,000 seats across the Pacific each year."

A joint venture between the two was originally rejected in 2016, Reuters said, when the Obama administration concluded after a year-and-a-half-long review that such a partnership would decrease choice and competition.

First published July 19, 1:23 p.m. PT.  
Update 1:49 p.m. PT: Adds confirmation, statements from American and the Transportation Department. Update, 3:29 p.m. PT: Adds comments from Qantas.