Commission rejects airline bid PNG route off agenda for Qantas

PEOPLE flying to Papua New Guinea will not get the benefits of Qantas’s service, after a code share plan was rejected.

The Federal Government’s International Air Services Commission’s draft decision on the proposal said it would be anti- competitive.

Subsequent to the ruling, Qantas withdrew its application last Tuesday.

The commission said if it approved Qantas’s proposed free- sale code share with Air Niugini that would reduce competition by increasing barriers to entry on the cities served only by Air Niugini. This includes the Townsville- Port Moresby route.

The commission said if the codeshare plan was approved, it risked the withdrawal of Virgin Australia on the Brisbane- Port Moresby sector, where Qantas and Air Niugini offer parallel services.

“This being the case, the commission considers that it would not be of benefit to the public to approve Qantas’s application,” the draft decision reads.

“The commission notes that Air Niugini has expanded its network to include services from Townsville alongside its flights from Cairns to Port Moresby in the absence of code share operations.

“The commission also notes that the absence of a code share is not an impediment to other forms of commercial relationships between Qantas and Air Niugini, including loyalty programs, bilateral pricing, and the purchase of freight capacity on Air Niugini’s B767 aircraft.”

Virgin Australia opposed the initial plan from Qantas, saying it would have an impact on its ability to continue flights to PNG.

Townsville Airport and Townsville Enterprise Limited both made submissions against the commission’s decision to rule against the code share proposal.

Townsville Airport chief operating officer Kevin Gill said the Air Niugini service from Townsville was still in its introductory phase and load factors had averaged 50 per cent during the first year.

“With performances such as this, the notion of a free- sale code share agreement being anti- competitive and blocking new entrants is questionable,” Mr Gill wrote.

Mr Gill wrote Townsville Airport did not consider Qantas or Virgin Australia to be in a position to offer services from TownsvillePNG for the “foreseeable future, if ever”.

“( Townsville Airport) is of the firm view that a free- sale Qantas codeshare on the existing Air Niugini Townsville- Port Moresby service will ensure that the services are sustainable, will stimulate growth in tourism and trade, and provide the platform from which to grow patronage . . . strengthening the links between these two cities and their surrounding regions,” the submission says.

Townsville Enterprise policy and investment director Michael McMillan said TEL believed code share would allow Air Niugini to leverage Qantas’s distribution capability, marketing and airline support.

Qantas was contacted for comment.