The government has defended Qantas’ proposed pan-Asian tie-up with Jetstar, describing the alliance as “not unusual” in international aviation terms.
In a submission to the Australian Competition and Consumer Commission, the department of infrastructure and transport said the plan was “generally consistent” with Australia’s aviation policy and its bilateral air services arrangements.
The department’s general manager of aviation industry policy, Stephen Borthwick, branded the bilateral system as “particularly restrictive” for Australia, limiting opportunities for Australian carriers to access intra-Asian markets.
Those restrictions on ownership, control and traffic rights had prompted a number of carriers to pursue similar alliances, as they sought to capitalise on growth in Asia, he told the ACCC.
Meanwhile, Borthwick predicted the alliance was unlikely to reduce competition in Asia. Instead, competition was set to rise with the liberalisation of regulatory arrangements in the region, and the 2015 implementation of the ASEAN open skies agreement.
“In relation to Australian-Asian markets, there is generally significant capacity available under our air services arrangements, and the vast majority of routes currently operated between Australia and the Asia-Pacific are served by multiple carriers,” he added.
