Qantas Is Being Fined For Illegally Selling Tickets On Their New York To Los Angeles Flight

Qantas operates an interesting tag flight from Los Angeles to New York. The daily flight is presently operated by a Boeing 747, though starting in September will instead be operated by a 787. This flight can exclusively be booked by passengers connecting onto and off of international flights, since this is a flight entirely within a country (which is different than fifth freedom routes, which are quite popular, where an airline operates a flight between two countries, neither of which they’re based out of).

It’s a unique flight no doubt, and currently the only US transcon flight operated by a 747. I had the chance to fly this route a few years back, and thought it was a cool experience. It’s certainly one of the most luxurious ways to fly coast-to-coast within North America.

Anyway, this brings us to an interesting case between the Department of Transportation and Qantas. Specifically, Qantas is being fined up to $125,000 for selling tickets between New York and Los Angeles to passengers who shouldn’t have been able to book this flight.

The Department of Transportation argues that under US cabotage laws, Qantas should have only been allowed to sell seats on this flight to those connecting onto or off of Qantas flights to Australia. However, in 2015 and 2016, Qantas sold seats on this flight in connection with international flights on partner airlines. Specifically, on their website Qantas would allow passengers to book their New York to Los Angeles flight in conjunction with codeshare flights from Los Angeles to Tahiti on Air Tahiti Nui, as well as codeshare flights between Los Angeles and Auckland on American.

Qantas denies breaking any US statutes and regulations, arguing that the codeshare flights they were selling had Qantas flight numbers, and therefore they thought that should be permissible. Qantas justified this using a 1959 ruling that said “a foreign carrier may incidentally transport within [the United States] only that traffic which it brings in or carries out.”

Qantas argues that the business model of airlines has changed significantly in the past 60 years with the introduction of codesharing, and therefore they assumed that selling this in conjunction with a codeshare flight would be acceptable. Clearly the DOT disagrees.

Qantas will observe the request of the DOT. They’ll have to pay $62,500 within 30 days, and will only have to pay the other $62,500 if they break the law again within the next year.

What’s interesting here is that when I wrote about this flight several years back, quite a few people chimed in insisting that it was permissible to book this in conjunction with an international flight on another airline. While that’s true, it seems that wasn’t actually legal, at least according to the DOT.

Comments

  1. Could Qantas claim their official policy is not to sell tickets between JFK and LAX , but it was a computer mistake? The same way DOT accepts the mistake fare argument.

  2. I think Qantas would rather win the point of kw and be able to fill the plane from codeshares, especially if he AA JV is back on.

  3. That decision does not cite any formal regulatory provision or agency guidance that codeshares don’t count, which leads me to theorize that there isn’t any. If I am correct I am a little surprised Qantas is not litigating the issue.

  4. Lucky, sorry to nitpick but the headline was confusing as hell as I thought Qantas were fined for selling tickets physically on the flight! You mean selling tickets *for* the flight…

  5. For most people this policy was always made very clear- you either had to arrive or depart on a Qantas flight “internationally “ I flew this leg last week and it is so much better than having to fly on a US carrier

  6. If USDOT says that QF cannot sell thru tickets on QF-flight# codeshares, then the US government contract for IAD/JFK-DXB should not have been given to JetBlue on the premise that “it’s a JetBlue codeshared flight operated by Emirates”.

  7. Australia should retaliate and ban United Airlines from flying to Australia for 1 year. Trump understands retaliation and looks down at weakness.

    Actually, there should be mutual cabotage in the U.S., Canada, EU, and Australia. Singapore and New Zealand should also be allowed cabotage in the US if they allow open skies by US carriers from all airports in their country, Singapore having only one airport with airline service. The UK should not be allowed unless it gives some slots at LHR for US carriers.

  8. Once the QF Dreamliner takes over this route with Business in a 1-2-1 config as a continuation of their BNE-LAX flight, it will easily be the best way to fly JFK-LAX (and I’d take it over AA’s 1-1 F, which is what I’d take today).

    I think Qantas’ argument is totally fair, as when it suits them many airlines often get away with saying if you’re on a codeshare with another airline’s flight number then you are their passenger (eg Swiss First Class ZRH lounge policy which denies Swiss F pax on a UA flight number citing they are UA F pax, not LX F pax).

    Incidentally, I am sure this route (years ago, not today) was bookable on its own via the QF frequent flyer call center – when a Platinum member would call and request the release of a points seat, the connection rule wouldn’t be checked by the computer and it was up to the knowledge of the call center staff.

  9. @asdf

    Litigating the issue will cost a lot more than $62,500. Their attitude is probably to pay it and get on with life.

  10. @red – Sure, but Qantas isn’t just losing $62,500 by throwing in the towel. It’s also losing all the revenue it could be making from selling seats on this route to connecting international codeshares.

  11. @tda
    I think there aren’t many customers going from New York to Tahiti via LAX on a QF flight.
    For the AA code-share part, I’m really surprised AA didn’t catch it! This is technically hurting AA’s business a little bit.

  12. I believe a few years ago the DOT awarded a government travel route to Jetblue from Washington to Dubai, even though Jetblue doesn’t operate to Dubai. The DOT’s reasoning? Jetblue has a codeshare with Emirates, and therefore Emirates operated flights with B6 codeshare were also Jetblue flights. DOT said that because of Jetblue’s codeshare with Emirates, this wouldn’t violate the Fly America Act. In this case they are doing the opposite, saying Qantas codeshare is meaningless.

  13. @f- no serious business traveler would consider the QF 747/787 as the best product to fly between LAX-JFK for one very important reason: lack of wifi.

    TBIT also lacks TSA-precheck; important for most frequent travelers. I’ve always booked on the A321T. The scheduling is better and far more convenient, as well as the nicer seats (in F at least).

  14. @Tony Most frequent travelers know that next-door Terminal 4 has both PreCheck and short regular lines, with a post-security connector to TBIT. I would be more worried about the JFK security line situation at T7 (soon T8).

  15. Totally unrelated, but if you think flying JFK-LAX on a 747 is rad…

    On March 10, I was flying SFO-SYD on QF 74, but due to various cancellations in Qantas’s network, there were a bunch of passengers stranded in LAX who needed to be “uplifted” to SYD. So we flew a 2/3-full 747 from SFO-LAX, which was an awesome experience, especially rocketing down 1R in a widebody, which was something I’d never experienced before.

    The subsequent part, where we had to wait for an obscure remote gate at LAX to open up and due to some fuel pumping issue spent 2 hours loading fuel, not quite as awesome.

  16. @ Tony
    “no serious business traveler would consider the QF 747/787 as the best product to fly between LAX-JFK for one very important reason: lack of wifi.”

    Speak for yourself, matey. You may be a wage slave who has to be at the constant beck and call of your masters. But this wage slave manages his own time and decides for himself when he’s going to be available – and when not.

    Different “serious” business travellers, different requirements.

    Incidentally, who are all these “humorous business travellers” who, I guess, are the ones who aren’t “serious”?

  17. As to the main post: the US government is riddled with hypocrisy. This is the land that celebrates free enterprise, but which mandates “Fly America” for its own staff – too terrified that, given a choice, their staff would choose better quality foreign airlines.

    I’ve always believed fairness demands that what is sauce for the goose is sauce for the gander. Let’s have proper open skies and free market competition (this includes opening up LHR – have an annual auction for slots and let them go to the highest bidder).

  18. Quite frankly this tag leg makes no sense considering the ticketing restrictions, fuel costs, crewing rotations and their own codeshares with AA and Alaska. I wonder how it has survived for so long given that it’s consistently less then half full whenever I have flown them or read trip reports. If QF cannot sell code share tickets on this leg then they may as well pull off this unviable route all together.

  19. Tony,

    I actually prefer a flight with no wi-fi so I don’t have to deal with neighbor tapping his keyboard for hours at a time

  20. @Red,

    It’s not an especially complicated issue; probably resolvable on cross motions for summary decision on a set of stipulated facts, as a matter of administrative law. Does a codeshare count under the rule or not? That would cost less than $62,500 at most firms’ rates. Plus, there’s the future revenue on this route, and potentially others.

  21. “That would cost less than $62,500 at most firms’ rates.”

    No, it wouldn’t. Not even close.

    You have to get the law firm up to speed on all the facts; they have to research the current state of the law; investigate what the DOT has allowed in the past; file the complaint; engage in discovery; prepare the motion; argue it in court; and prepare the post-hearing orders.

    I would quote an estimate of $250,000. And, yes, I am a lawyer.

  22. I hope they just get rid of these silly rules and let the likes of Ryan air and EasyJet rule the American sky.

  23. I suspect Qantas knew, or at least strongly suspected, they’d lose. It’s likely part of the reason they’re downgrading to a 787, so there are fewer unsold seats on the JFK-LAX leg after New Yorkers who want to go to SYD, MEL, or BNE are accommodated.

  24. There are many threads about people who also booked this flight as a rewards ticket or part of an around-the-world only to be refused check-in/boarding at the airport because Qantas weren’t allowed to let people travel on it without the on-connection. The lucky ones just had it fail at ticketing.

    Seems their system doesn’t handle this little exception in many cases.

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