Christchurch route seen as most vulnerable to constraints
The Australian Competition and Consumer Commission (ACCC) has allowed the Qantas-Emirates alliance to continue for five years — but with a special condition on certain New Zealand-related cargo.
The global alliance covers Qantas and Emirates’ air passenger and cargo transport operations.
According to the ACCC, the terms of the authorisation granted are largely unchanged from last month’s draft decision.
“The continued coordination by Qantas and Emirates of their air passenger and cargo transport operations will likely lead to a range of public benefits such as improved connectivity and loyalty program benefits,” ACCC commissioner Roger Featherston says.
But the ACCC has imposed a condition of authorisation to address continuing competition concerns on the Sydney -Christchurch route.
“The alliance must report to the ACCC on seats and passengers flown, fares and route profitability on routes between Australia and New Zealand,” Featherston says.
“The condition allows us to set a minimum level of capacity on the Sydney to Christchurch route at any time, if needed.”
The ACCC considers the alliance “is likely to increase the ability and incentives of the Applicants to unilaterally reduce or limit growth in air cargo transport capacity between Sydney and Christchurch as there may not be sufficient competitive constraints to prevent such an outcome.
“As a result, the ACCC considers that the Proposed Conduct is likely to result in competitive detriment in the market for international air cargo transport services, although the extent of such detriment may be less than in the relevant trans-Tasman passenger market given the potential for entry and/or expansion by dedicated freighters.”
While deeming a set capacity requirement to be inappropriate, it leaves the option open for any time in the life of the authorisation will monitor that aspect in the meantime.
“The condition provides that, before deciding to impose a capacity requirement, the ACCC must conduct a review, including consulting with the Applicants and undertaking any other consultation the ACCC considers necessary,” it says.