Conditional ACCC approval for QF-EK tie-up
The Australian Competition and Consumer Commission has just issued a draft decision proposing to grant authorisation for five years for the alliance between Qantas Airways and Emirates.
“The ACCC considers that the alliance is likely to result in material, although not substantial, benefits to Australian consumers,” said ACCC chairman Rod Sims.
He said the ACCC considers that the main benefit arising is an improved product and service offering by the two airlines to their customers, including increased access to each others’ flights, destinations and frequent flyer programs.
“The alliance is likely to result in some public detriments through its effect on competition where Qantas and Emirates currently offer overlapping services,” Sims said, adding that “In most of these regions there are factors which are likely to mitigate the public detriment, including continuing competition from a number of established airlines”.
However the ACCC is concerned about overlapping routes between Australia and New Zealand where the alliance “may have an increased ability and incentive to reduce or limit growth in its capacity in order to raise airfares”, with the Commission proposing a condition to restrict the ability of the alliance in this regard.
The proposed approval period is only five years, rather than the ten year term requested in the QF and EK applications.
More information in today’s Travel Daily.