Australian’s competition watchdog has given Qantas and Emirates the initial go-ahead for another five years of partnership.
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The Australian Competition and Consumer Commission has granted the airlines a draft determination, offering to extend the partnership, which covers destinations in Asia, Oceana, Europe, the Middle East and North Africa, another five years.
“The ACCC considers that the alliance is likely to continue to result in a range of public benefits,” said ACCC Commissioner Roger Featherston,
“Combining the networks of Qantas and Emirates provides customers with access to more flights and destinations under a single airline code and improves connectivity.”
“However, the ACCC is concerned that the alliance is likely to significantly impact competition on one route, Sydney to Christchurch; Qantas and Emirates are the two major operators on this route and their only competition is from the Virgin Australia and Air New Zealand alliance”
The ACCC is proposing to address concerns by requesting Qantas provide regular reports on passenger numbers and profitability to make sure the alliance is not limiting seats.
When the initial alliance was approved by ACCC in 2013, the watchdog included a condition that the airlines at least maintain their current level of capacity on overlapping routes.
Saj Ahmad, chief analyst at StrategicAero Research, says the alliance has led to better and more competitive fares.
“Either way, customers have far more choice connecting via Emirates and Qantas between the northern and southern hemisphere compared to any other airline or grouping. And prices reflect that competitive edge,” he said.
