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American Airlines Gets Tentative DOT Nod on Deal With Qantas

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American Airlines Group Inc. (AAL - Free Report) has received a tentative approval from the U.S. Department of Transportation (DOT) regarding its joint business with Qantas. This joint venture will strengthen the carrier’s 30-plus years of partnership with Qantas by fostering air travel between the United States and Australia as well as New Zealand.

The joint agreement will pave the way for adding routes connecting United States with Australia and New Zealand. American Airlines will also enjoy an expanded codeshare partnership with Qantas and optimized schedules on the trans-Pacific services while offering passengers with shorter trip time. Moreover, passengers will have the privilege of a wider access to Qantas’ seats, which in turn, should lower airfares.

Further, the joint deal will allow American Airlines to integrate its frequent flyer program with Qantas, enabling passengers to earn extra frequent flyer benefits. Additionally, the carrier will offer customers improved facilities at airports and lounges in collaboration with Qantas.


As part of this proposed joint business, American Airlines in cooperation with Qantas plans to launch several services into the first two years of the agreement. Two such routes are Brisbane–Chicago and Brisbane–San Francisco.

DOT’s final approval on the joint business is expected in the coming weeks.

Zacks Rank & Key Picks

American Airlines carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are SkyWest, Inc. (SKYW - Free Report) , GATX Corporation (GATX - Free Report) and Fly Leasing Limited (FLY - Free Report) . While Fly Leasing sports a Zacks Rank #1 (Strong Buy), SkyWest and GATX carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of SkyWest have surged more than 34% so far this year. Meanwhile, both GATX and Fly Leasing flaunt an encouraging earnings history, having outperformed the Zacks Consensus Estimate in each of the trailing four quarters.

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