Qantas and American Airlines had called for the ACCC to grant interim approval as a matter of urgency because the best time for the launch of the new services was in the busy travel month of December. Photo: Peter Braig

Qantas and American Airlines have gained interim approval from the competition regulator to deepen their alliance on trans-Pacific routes despite opposition from Air New Zealand.

The Australian Competition and Consumer Commission said on Thursday it had decided to grant interim authorisation because it was likely to lead to additional capacity on the Sydney-Los Angeles route, as well as increased competition and capacity on Sydney-San Francisco.

"This is likely to result in benefits to passengers that wish to use these services," ACCC commissioner Jill Walker said. 

"Further, granting interim authorisation is unlikely to have any permanent impact on the market that could not be reversed in the event final authorisation is not granted."

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However, the regulator emphasised that its decision to grant interim authorisation did not indicate whether it would give final approval to Qantas and American Airlines.

American Airlines, which has not flown to Australia since the 1990s, unveiled plans in June to operate daily Boeing 777-300ER services between Sydney and Los Angeles from December. It would let Qantas redeploy its Boeing 747-400s to fly between Sydney and San Francisco, ending the monopoly that United Airlines holds on the route.

Their expansion will boost capacity between Australia and the US by 9 per cent.

Qantas and American Airlines had called for the ACCC to grant interim approval as a matter of urgency because the best time for the launch of the new services was in the busy travel month of December.

However, Air New Zealand last week urged the regulator to delay allowing Qantas and American Airlines to begin new services in December.

The Kiwi flag carrier believed there was "no compelling reason" why the revenue-sharing alliance should begin in time for the busy Christmas holiday season because the airlines had other means such as code-sharing under their existing alliance approvals.

Qantas said customers would soon be able to start booking direct flights to San Francisco for travel from December 18. 

"[Travellers] are thrilled we are returning to San Francisco, which is the most popular onward destination for Qantas' customers travelling to the US," Qantas International chief executive Gareth Evans said.

The ACCC's decision comes as Air Canada announced it will expand its services to Australia next year when it begins flights from from Brisbane to Vancouver. Its expansion will increase pressure on Qantas, Virgin Australia and Air New Zealand, and raise the prospect of a fare war on the already competitive trans-Pacific routes.

In their application, Qantas and American Airlines asked the regulator to approve their deeper alliance – a revenue-share agreement – for a decade. 

However, the length of approval sought is expected to be too long for the ACCC, which recently gave the green light to Virgin Australia and Delta Air Lines extending their tie up for another five years – half the length of time the two airlines had asked for.