ACCC cites “significant public detriment” from QF/MU alliance.
The Australian Competition and Consumer Commission has just issued a draft determination in which it is proposing to deny authorisation for Qantas and China Eastern Airlines to coordinate their operations between Australia and China.
The ACCC says the proposed alliance would give the carriers “increased ability and incentive to limit capacity and/or increase airfares on the Sydney-Shanghai route”.
ACCC chairman Rod Sims said the Commission understands QF’s desire to form an alliance with a Chinese airline to establish a gateway to North East Asia.
“However, the ACCC’s concern is that they have chosen to do so with their main competitor on the one route between Australia and China on which Qantas operates direct flights,” he said.
Although there would be limited public benefits, including the co-location of Qantas at the China Eastern terminal in Shanghai, “the range of travel options available to passengers for travel beyond Shanghai would not automatically be increased,” Sims said.
The ACCC is seeking submissions from interested parties in relation to the draft determination prior to making a final decision, with input due by 08 April.
More information in today’s issue of Travel Daily.