ACCC five-year approval for Qantas, American Airlines alliance

What’s driving the fierce competition on flights from Australia to the US?

Qantas passengers heading to San Francisco and Silicon Valley.

Qantas’s rebooted route from Sydney to San Francisco has kickstarted competition for trans-Pacific flights and is providing a big boost in Aussie tourists and business travellers to the US airport.

Qantas became the 41st carrier to fly into and out of San Francisco International after the airline started up the route in December following a five-year moratorium.

The Australian Competition & Consumer Commission yesterday granted a five-year approval for Qantas’s alliance with American Airlines in which the two carriers will fly operations across the Pacific.

“The ACCC considers this ­alliance would be likely to result in continued public benefits for passengers travelling between Australia and the US through enhanced products and services including new frequencies and destinations, more online connections, better scheduling, greater loyalty program benefits, and improved lounge access,” ACCC commissioner Roger Featherston said.

“The alliance is also likely to promote competition between other airlines that provide ser­vices on trans-Pacific routes.”

According to San Francisco International Airport’s deputy ­director and marketing chief Kandace Bender, the restarted route already has increased passenger numbers through its gates.

“We are thrilled to have Qantas back. We lost capacity to Australia when United changed from a 777 to a 787 and so we are very excited to have Qantas return, pick up that slack and increase passengers coming to and from Sydney,” she told The Australian.

“We have more than 330 travelling from San Francisco to Sydney and beyond every day so there really is a good market for additional services on that route.

“And Qantas are telling us that the route is doing very well and they are very happy with the load factor. They just started in December at five flights a week and now they have already increased to six flights a week.”

San Francisco International Airport, alongside the city’s tourism body, is providing marketing support to help promote the new route.

But the airport has no immediate plans to get other airlines to fly direct routes from Australia, saying it is focused on Qantas, United and Air New Zealand, which operates flights to San Francisco from Auckland.

Competition remains fierce on flights from Australia to the US, particularly against the backdrop of a low Australian dollar, which has boosted US tourism into the region.

“Traffic is really flowing both ways despite the low Australian dollar and that’s what we like to see because it’s the sign of a healthy route for a carrier,” Ms Bender said.

“It’s that old saying, a rising tide lifts all ships. And that’s what is happening here; the market is being stimulated with these new routes, which mean more people are travelling and fares are going down amid the competition. That’s a win-win for passengers.”

Ms Bender said the route was proving to be particularly popular among Australia’s technology entrepreneurs, who routinely travelled to Silicon Valley to network and build businesses.

More than 22,000 Australians work in tech centres on the US west coast as favourable working conditions ushered in through E-3 visas have paved the way for thousands to head to the US.

“Things are booming in San Francisco with the tech industry right now,” Ms Bender said.

“Being in the heart of Silicon Valley means there are lots of people going back and forth through the airport.”