QF/EK alliance push-back

QANTAS and Emirates have urged the Australian Competition and Consumer Commission not to proceed with a requirement that would see them forced to report average fares, revenue, seats and passenger numbers on trans- Tasman services.

The reporting is a proposed condition for the approval of the re-authorisation of the Qantas- Emirates alliance, which was lodged last year ( TD 11 Oct).

The Restated Master Coordination Agreement would see QF and EK continue to cooperate extensively across their global networks for a further period of five years.

However the ACCC has warned that the updated pact will “significantly impact competition” on the Sydney-Christchurch route.

In a response made public this week, QF and EK say they don’t agree, with the Tasman market as a whole “characterised by intense competition” including the strong presence of Air NZ & Virgin Aust.

The alliance partners say they do not have the ability to artificially increase fares or restrict capacity on the Tasman, with Qantas and Jetstar “inherently incentivised to invest in this market” which they treat as an extension of their Australian domestic networks and vital to provide feeder traffic.

The airlines welcomed the key conclusions of the ACCC draft determination ( TD 16 Feb) which said the continuation of the alliance would generate “significant public benefits that outweigh any competitive detriment”.