Qantas (ASX:QAN) CEO Alan Joyce and American Airlines CEO Doug Parker have announced that they are set to deepen their trans-Pacific alliance. As of December Qantas will be running a six day a week non-stop flight from Sydney to San Francisco. American airlines will in turn run a daily direct flight from Los Angeles to Sydney, providing new destinations for their customers.
The flight between Sydney and San Francisco will take around 14 hrs and be flown on Qantas Boeing 747 whereas the Sydney to Los Angeles route will be on American Airline’s flagship Boeing 777-300ER.
"We are working to significantly expand our joint business to allow us greater commercial operation on trans-Pacific routes between North America and Australia and New Zealand.”
The new Pacific routes are still subject to regulatory approval however the group is hoping to increase their Pacific market by around nine percent and as a result “would leave American (Airlines) and Qantas as the biggest players on the Pacific route, taking advantage of the free trade agreement between the two countries,” Mr Joyce said.
According to Mr Joyce, a lower Australian dollar should result in more Americans flying to Australia and "that's why we're very excited at having the American organisation help market this new revenue sharing adventure going forward.”
In 2011 Qantas abandoned their Sydney to San Francisco route however last month revealed that San Francisco is the seventh largest corporate destination from Australia and with Silicon Valley’s technology boom since the global financial crisis it made sense for Qantas to reinstate flights to San Francisco.
The only competitor Qantas will face on the new flight path is United Airlines, whom offers daily flights from Sydney- San Francisco. Qantas will run six 747 flights per week and as a result will pull out of four weekly 747 flights from Sydney to Los Angeles and one weekly flight from Melbourne to Los Angeles.
Author: Imran Valibhoy
Jun 10, 2015
Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.