June 9, 2015 / 7:20 PM / 4 years ago

American Airlines, Qantas to launch U.S.-Australia flights

MIAMI/SYDNEY (Reuters) - Qantas Airways Ltd and American Airlines Group Inc are stepping up their alliance, announcing on Tuesday that the U.S. carrier will operate a direct flight from Los Angeles to Sydney for the first time.

Qantas will also resume flights from Sydney to San Francisco as the two airlines shift their four-year-old joint venture to a revenue sharing agreement.

The new flights, due to begin in December, will boost air capacity between Australia and the mainland United States by around 9 percent.

Qantas CEO Alan Joyce said a lower Australian dollar should lead to significant growth in the number of Americans flying to Australia.

“We think that has the potential of increasing the demand dramatically,” Joyce said of the new deal, adding that Qantas expected a boom in the technology industry in Silicon valley to underpin its return to San Francisco.

“We expect it to be a new generative market for us,” he said at the International Air Transport Association (IATA) annual meeting in Miami.

Qantas abandoned its Sydney to San Francisco route in 2011 when it decided to shift flights to Dallas, a major hub for American Airlines.

Beginning in December, American will fly daily between Los Angeles and Sydney, while Qantas will fly on peak days between Sydney and San Francisco, increasing frequency to six flights a week in January 2016.

American will operate using Boeing Co 777-300ER widebody aircraft, the companies said.

American Airlines Chairman and Chief Executive Doug Parker said the expanded partnership deal would make both airlines stronger global competitors.

“Strengthening those ties has provided us with a solid foundation to introduce American-operated flights into the Australian region,” Parker said in a joint statement.

Asked whether the deal would lead to lower trans-Pacific fares, Joyce said he did not believe “the capacity will take that long to absorb.”

Australia had seen “a little bit of weakness” in the number of Australians going to places like Honolulu “but it’s not dramatic,” he added.

The airlines said they will ask the U.S. government for antitrust immunity for the new service.

The U.S. Department of Transportation currently is reviewing an application for antitrust immunity for a Delta Air Lines Inc and Grupo Aeromexico SAB de CV joint venture.

Delta has said there is potential for a similar venture with Brazil’s Gol Linhas Aereas Inteligentes SA.

Reporting by Alwyn Scott and Jeffrey Dastin in MIAMI and Jane Wardell in SYDNEY; Editing by Victoria Bryan, Christian Plumb and Phil Berlowitz

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