Puerto Rico’s drive to lease airports and other infrastructure is gathering speed as the US commonwealth readies an offer to lease out San Juan Luis Munoz Marin International Airport (Reuters, 19-May-2011). The airport could be the first major US airport to successfully form a public private partnership (PPP) if the government reaches a deal. The government has been in talks with American Airlines and other carriers that must sign-off on any deal and expects these talks to wrap up in Jun-2011. The government and American are drafting an MoU that will establish ground rules for carriers under a privately managed airport.
Puerto Rico's drive to privatise gains speed
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US DOT rejects Qantas-American Airlines joint venture under pressure of unchecked consolidation
After complaints about airlines amassing power through joint ventures to the detriment of consumers, the US DOT appears to be exerting greater and more conservative scrutiny on partnerships. DOT has rejected a proposed JV between American Airlines and Qantas. After DOT declined their request for a much longer response time American and Qantas withdrew their application, submitted in Jun-2015.
At a top level the JV does seem to raise concern: combined, Qantas and American would hold 59% of the US-Australia market. Yet almost all of that – 53% – is from Qantas; American adds only 6ppt.
DOT rejects the notion that such larger market share can possibly be in the interest of consumers. Yet it appears to overlook the benefit American might bring in exchange for incremental market share gains. Nor is it clear if this combination is more anti-competitive than some JVs where two airlines, each with a small- or medium-sized position, combine and become multiples larger. Qantas' 53% market share was earned through quality and smart loyalty programme development while competitors lagged.
Qantas will continue growth in North America, its most successful international market, but American Airlines' growth is uncertain and it may re-evaluate a supposedly planned Los Angeles-Melbourne 787 service.