Qantas Airways is threatening to cancel services if the partnership venture with American Airlines does not receive regulatory approval from the United States to coordinate prices and schedules.
The original application from Qantas and American covered the U.S., Australiaand New Zealand and was rejected in 2016 by the Obama administration due to objections from rival carriers Hawaiian Airlines and JetBlue Airways.
Officials from Qantas and American are hoping President Donald Trump will approve the partnership as he has promised to help boost U.S. industry. If rejected, Qantas has threatened to limit or eliminate service between Sydney and Dallas, and American would reduce flights between Los Angeles, Sydney and Auckland.
“The proposed joint business will significantly improve service, stimulate demand and unlock more than $300 million annually in consumer benefits that are not achievable through any other form of cooperation,” Qantas said in a statement.
To make the routes between countries economically viable, Qantas and American rely on code-share agreements. Both carriers are looking to expand the partnership by offering more flights and service to new cities.
While U.S. officials initially rejected the original application for the joint venture, regulators in Australia and New Zealand approved it in 2016.