THE long running Joint Services Agreement between Qantas and British Airways (TD 03 Nov) is set to continue for another five years, after the Australian Competition and Consumer Commission gave draft approval for its extension (TD breaking news yesterday).
The pact, in operation for 14 years now, allows QF and BA to coordinate prices and schedules, and has primarily been applied to the route between Australia and Europe, although it provides scope for them to cooperate on any routes worldwide.
ACCC chairman Graeme Samuel said the JSA is likely to continue to deliver lower fares and a broader availability of schedules for passengers.
“Strong competition on most routes operated under the JSA means that cost savings arising from the JSA are likely to be passed onto consumers,” he said.
However the ACCC also said that there had been some decline in the level of the public benefits delivered by the JSA since it was last considered in 2005.
“The applicants have reduced capacity on some routes and decreased the schedule options since the last authorisation,” the draft determination says.
British Airways has attracted attention this week by confirming that it was stopping flights on its London-Singapore-Sydney route for some months this year, as exclusively revealed by TD on Wed.
And BA’s share of international passengers from Australia has slumped from 4.9% a decade ago to just 1.5% last year, making it the 13th largest carrier operating here, behind JAL and United.
However the draft determination also reveals that the Qantas/BA alliance last year had a 56.1% share of the business traveller market between Australia and the UK – more than five times the 11% for Singapore Airlines and 10.4% for Emirates.
The ACCC has also declined to issue an unlimited renewal as requested by Qantas and BA, instead limiting the authorisation to five years.
The draft determination also includes an interim authorisation which will allow the JSA to continue until a final decision is made, and further submissions are now sought by 25 Feb 2010.