American Airlines & Qatar Airways Announce Strategic Partnership

Filed Under: American, Qatar

Hey, here’s something to be genuinely excited about, as it points towards the cat fight between the US carriers and Gulf carriers coming to an end. Or perhaps it just points to American’s lack of strategy and follow-through.

American Airlines & Qatar Airways to codeshare

American Airlines and Qatar Airways have announced that they plan to renew their codeshare agreement. The airlines say that this is the first step to building a strategic partnership that will increase commercial cooperation.

Pending government approval, American will place their code on select Qatar Airways nonstop and connecting services to and from the US, giving customers access to destinations in the Middle East, East Africa, South Asia, and Southeast Asia.

Furthermore, Qatar Airways will place their code on select American flights at hubs in Chicago, Dallas, Los Angeles, Miami, New York, and Philadelphia, as well as on American’s international flights to and from Europe, the Caribbean, Central America, and South America.

The two airlines used to codeshare, but they stopped codesharing in mid-2017, as the “big three” US carriers accused the “big three” Gulf carriers of illegal subsidies.

American Airlines & Qatar Airways are restoring codeshares

What exactly is a codeshare?

Both American Airlines and Qatar Airways already belong to the oneworld alliance, so what exactly are the benefits of a codeshare?

The two airlines belonging to the same alliance means that loyalty program members can earn and redeem miles across all airlines, and receive certain benefits. However, being part of the same alliance doesn’t necessarily mean there will be a codeshare agreement.

With a codeshare agreement, two airlines place “codes” on one another’s flights. There’s some sort of revenue splitting agreement, and the idea is that airlines have an incentive to promote these flights on partners in a way that they wouldn’t otherwise have an incentive to do.

This is a higher level of cooperation than an interline agreement, but less cooperation than a joint venture.

American Airlines & Qatar Airways both belong to oneworld

American Airlines may fly to Doha

American Airlines has also announced that following the restoration of this codeshare agreement, the airline is exploring adding flights from the US to Doha.

While I can appreciate the concept of a Doha route in terms of connectivity beyond Qatar Airways’ hub, the reality is that Qatar Airways already flies from all major American hubs to Doha, with the exception of Charlotte and Phoenix.

I can’t imagine they’d add service to Doha from Charlotte or Phoenix, so the only other route that comes to mind is a Seattle to Doha flight, given American’s recent announcement of a Seattle to Bangalore flight.

Could we see American continue to increase their Seattle presence, or are the new Bangalore and London flights the only ones they’ll have from there?

American Airlines is considering flying to Doha

What American & Qatar executives are saying

Given how public the battle between American & Qatar has been in the past, I figure it’s worth sharing what the executives of the two airlines are saying.

American Airlines CEO, His Excellency Mr. Doug Parker, had the following to say:

“Our goal is to continue to expand and deepen our global partnerships to complement American’s network and create more choice for our customers. The issues that led to the suspension of our partnership two years ago have been addressed, and we believe resuming our codeshare agreement will allow us to provide service to markets that our customers, team members and shareholders value, including new growth opportunities for American Airlines. We look forward to the renewed cooperation between our airlines and hope to build an even stronger relationship with Qatar Airways over time.”

Qatar Airways CEO, His Excellency Mr. Akbar Al Baker, had the following to say:

“We are very pleased to secure this strategic partnership with American Airlines — an agreement between two successful and ambitious airlines with a shared common purpose to enhance the customer experience. The deal will bring together two of the world’s largest airline networks, increasing choices for millions of passengers and providing seamless connectivity to a significant number of new destinations, in line with Qatar Airways’ successful growth strategy. We have moved on from past issues and look forward to working closely with American Airlines to build a world-leading partnership for all our customers. This agreement will harness our complementary strengths and resources and enable more customers to experience Qatar Airways’ award-winning product quality.”

Lastly, Vasu Raja, American’s SVP of Network Strategy, had the following to say:

“This partnership with Qatar is another step to increase our connectivity, while providing more choice and making travel easier and more accessible for our customers. As we look to build out a truly global network and create a strong presence in Africa, the Middle East and Asia, the renewed codeshare with Qatar Airways will be one of the cornerstones of making that a reality.”

Why American & Qatar Airways cut ties to begin with

As mentioned above, American Airlines and Qatar Airways cut their codeshare agreement in mid-2017. American seemed to do this in order to prove their point about the Gulf carriers being illegally subsidized.

This was due to a battle that had been going on for years. The “big three” US carriers were arguing that the Gulf carriers shouldn’t be allowed to participate in the Open Skies agreement, as they were essentially money-losing, government subsidized airlines.

In early 2018 the US and Qatar reached an agreement regarding this dispute, which essentially maintained the status quo. US airlines tried to claim this as a victory, though in reality I’d say Qatar Airways was the winner here.

It’s interesting to see Parker say that the issue that caused the suspension of the codeshare agreement has been addressed. I’m curious what he thinks has actually changed?

In May 2019 the Partnership for Open & Fair Skies, which is funded by American Airlines, uploaded the following ad to YouTube:

I wonder what has changed in the past eight months? Is Qatar Airways no longer trade cheating? Is the US airline industry no longer at risk. Are 1.2 million jobs no longer at risk? Is Qatar Airways no longer getting illegal subsidies?

Don’t get me wrong, I’m thrilled to see American and Qatar working together. This is good for consumers, and it means this silly dispute is losing ground.

Bottom line

Man, 2020 is a crazy time to be alive. If you told me last year that American would launch a Seattle to Bangalore flight, and would sing the praises of Qatar Airways and consider service to Doha, I would’ve told you to get outta here. But it’s happening.

I’ll be very curious to see where American could add Doha service from. Could this be part of an expanded Seattle strategy, or will American replicate a route to Doha that’s already served by Qatar Airways?

What do you make of this renewed American Airlines & Qatar Airways partnership?

Comments
  1. No chance AA adds service to DOH. The sheer volume of connecting traffic already on the QR flights makes competing on an O&D basis impossible and it doesn’t make sense to add a route solely to provide longhaul feed to longhaul connections (longhaul fares are cheap enough and now you want to split the fare 50/50 on the same operating cost base). I think Delta tried to fly to DXB a while back and got crushed on it.

  2. I guess that a multitude of considerations factored into AA’s change of heart towards Qatar. I wouldn’t be surprised if the Delta-Latam tie-up played a role, as well as Qatar’s increasing its ownership share in BA.

    As far as AA flying aircraft to Doha goes, who in their right mind would fly AA metal in lieu of QR??

  3. @Schlingu

    Qatar Airways direct flights to the USA are SO expensive.

    But that’s about the only reason.

  4. SE Asia? Will AA finally remove “Transpacific Only” requirement for awards from USA/Canada-Asia? No way to redeem on Qatar unless they do.

  5. Phl or Boston to DOH makes sense. Those flights are full and from DOH you can go just about anywhere in the world.

  6. Either QR or AA should be able to make CLT-DOH work. CLT is a bigger hub than ORD and PHL, and DOH-ORD and DOH-PHL are consistently full, especially during the summer season. QR makes ATL work, and they have no connectivity with DL.

  7. If AA really does fly to DOH I would guess it would be from DFW. With massive connecting hubs on both ends I have to imagine they could fill two flights a day, especially if AA used a 788 on the route.

  8. You’ve asked what’s changed at AA and Qatar to move them to restart a more closer partnership. My view is that a lot has changed:

    Qatar let Air Italy die. The subsidy issue is real but it only really effects AA if Qatar uses those subsidies to fly Fifth Freedom routes or backdoor Fifth Freedom routes to Europe from the US. That was the plan with Air Italy. The bottom line is that Qatar seems to have abandoned that (again).

    Qatar may be focused more on a post-subsidy world because of the pressure that the Qatar state is feeling from its neighbors and the fact that all of the ME3 are having to live more within their means.

    AA is feeling pressure because Delta pulled off a coup with LATAM and, while the subsidy issue is likely felt to be real in Fort Worth, AA probably felt that it was more Delta’s hill to die on and not AA’s.

    Oneworld in general is likely feeling that it has some uncertainty over both Brexit and the LATAM departure. Neither issue faces the other two major alliances.

  9. I find it funny that you think UA and LH buying TP is bad for consumers while AA and QR partnering closer together is good for consumers. Hm, what is notable about QR? Perhaps their frequent fare sales to faraway places? Perhaps AA would like to get closer to them to encourage them to knock it off with that? Remind me again how that’s good for consumers?

  10. @ Chris — I’d say zero. Not only is Heathrow heavily slot controlled, but there wouldn’t be much upside to that for American based on a codeshare agreement.

  11. @ Bgriff — There’s a huge difference. The North transatlantic market isn’t nearly competitive enough, and is now controlled by three mega joint ventures. A very limited amount of the capacity is outside of those joint ventures, and TAP Air Portugal is one of those airlines that’s truly competing in that market.

    US to Middle East/India/etc. is a totally different story. In my opinion there’s not enough cooperation there between airlines. Look at how few nonstop flights there are by US airlines in those markets. A codeshare agreement doesn’t harm consumers — it doesn’t lead to price or schedule coordinating, and only improves opportunities to book complex routings on single tickets.

  12. @ Michael Riegel — Nothing has changed, and frankly I wouldn’t expect it to change. American has higher earning on joint venture partners, but I doubt we’ll see any change in mileage earning rates just on account of a codeshare agreement.

  13. QR having an increasingly bigger stake in IAG also means AA can’t just ignore them either. Working together is much more productive for everyone.

  14. Hah flying AA to DOH? 13-16 hours of torture just for the heck of it? I’m good. I also love how you referred to doug as “American Airlines CEO, His Excellency Mr. Doug Parker”

  15. @ Brian — No doubt Air Italy is a consideration here, but there are two things I take issue with:
    1) The “big three” US carriers were crying foul about the “big three” Gulf carriers long before Qatar Airways invested in Air Italy
    2) Air Italy seemed to be more of a vanity project than an actual attempt by Qatar Airways to get around their Open Skies agreement; with Alitalia you have the Italian government funding a money losing airline offering Europe to US service, while with Air Italy you had the Qatari government funding a money losing airline offering Europe to US service, and the only party really winning was consumers

  16. Maybe one thing to think about is that if they are codesharing, the flights for those that are bound to follow the rule that you must fly on a “US” airline (I think its the Safe Harbor act) for government and DOD employees and contractors means that this reopens the Qatar routes for those employees.

  17. @Steve, that’s a really good question. That would be awesome. AA leases QR planes with Q Suites and then flies over Saudi again and cuts time off each route.

  18. Would Phoenix be really that unrealistic? It’s the largest metro area in the US that they currently don’t fly to, and it’s an AA hub. I know this hasn’t boded as well for other international flights to Phoenix, but there is a substantial South Asian immigrant population here. Maybe I’m just a dreamer

  19. What’s changed? AA realising they can’t win and best to get back in bed and little old Dougie want to learn what service is about with airlines. And QR might end up buying more of LATAM etc.

  20. @Gene lol you’re not the only one who noticed that. Feels like Vasu Raja gets quoted in every AA route article Lucky writes

  21. Could QR fly to SEA and simultaneously drop PHL which AA could take over?? Or AA try make CLT/PHX/SEA work themselves on a 788 maybe…

  22. Wait what about SFO?? Didn’t realise QR didn’t fly there. Even AA could make that work without many US connections

  23. I love Qatar airways-great service & the qsuites far outweigh any AA first class. No way I would fly AA to Doha.

  24. What about the fight between the three major ME companies? Any changes in that fight? Qatar, Emirates and Etihad is only schoolkids here.

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