Australian Watchdog Proposes Approving Qantas, Emirates Alliance

Australia’s consumer watchdog, the ACCC, is proposing to reauthorise the commercial alliance between Qantas and Emirates for a further five years.

The existing alliance, approved by the Australian Competition and Consumer Commission in 2013, covers Qantas’ and Emirates’ passenger and cargo operations. ACCC approval provides immunity from court action for conduct that may raise concerns under Australian competition law.

“The ACCC considers that the alliance is likely to continue to result in a range of public benefits,” ACCC Commissioner Roger Featherston said. “Combining the networks of Qantas and Emirates provides customers with access to more flights and destinations under a single airline code and improves connectivity.”

The two airlines are seeking reauthorisation to coordinate their operations including planning, scheduling, operating and capacity, sales, marketing, advertising, promotion, and pricing for passengers, freight customers and agents.

Qantas and Emirates welcomed the ACCC’s draft determination, with a Qantas spokesperson saying “The first five years of the partnership has lived up to the promise of serving our customers better, together, and the changes to our network are designed to reinforce this for the next five years.”

The ACCC outlined a concern that the alliance is likely to impact competition on the Sydney to Christchurch route, with Qantas and Emirates the two major operators, and the only competition coming from the Virgin Australia-Air New Zealand alliance.

To address the concern, the ACCC is proposing a condition requiring Qantas and Emirates to provide the ACCC with regular reports on seats and passenger numbers, plus fares and route profitability.

The ACCC’s position on the Australia-New Zealand route comes after similar concerns it voiced in the granting of the 2013 alliance approval when it imposed reporting and capacity conditions on four routes between Australia and New Zealand.

The watchdog will take submissions on its proposal and make a final decision later this year.

The ACCC announced separately its decision to reauthorise the continued coordination of three Qantas Asian-based joint ventures: Jetstar Asia, Jetstar Pacific and Jetstar Japan. The decision continues an ACCC authorisation made in 2013.