Qantas gets green light for alliance ground-work
The competition regulator will allow Qantas and Emirates to start working together on their alliance because of what it describes as the ‘‘long lead time’’ needed to market and sell tickets.
In a decision released this morning, the Australian Competition and Consumer Commission’s chairman, Rod Sims, said he would grant ‘‘interim authorisation’’ for the airlines’ tie-up.
But the regulator has not allowed Qantas and Emirates to begin early preparations on the trans-Tasman route, after it raised concerns last month about the impact on flights between Australia and New Zealand.
Mr Sims said the regulator had decided to allow the airlines to start implementing their alliance on their other routes because of the ‘‘long lead time required to market and sell tickets before the commencement of long-haul services’’.
The airlines still require final approval – expected in March – for their alliance from the regulator. Last month the ACCC gave tentative approval for the tie up, which is focused on routes between Australia and Europe.
The regulator’s granting today of ‘‘interim authorisation’’ will allow Qantas and Emirates to begin discussions on joint sales and pricing strategy, system integration and testing, customer handling, joint marketing, and scheduling and capacity coordination.
‘‘Under interim authorisation, the applicants will be able to commence activities that will enhance the product and service offerings to Qantas and Emirates customers,’’ Mr Sims said.
‘‘In making its decision, the ACCC has accepted written assurances from the parties that should the ACCC ultimately decide not to allow the alliance to go ahead, the airlines will accommodate consumers’ bookings.’’
After ditching in October their request for ‘‘interim authorisation, the airlines reapplied late last month after the competition regulator gave a tentative nod of approval for their deal.
The proposed tie-up covers routes from Australia to Europe, North Africa, the Middle East, Asia and New Zealand. It will result in Qantas shifting its hub for European flights from Singapore to Emirates’ base in Dubai.
The ACCC gave tentative approval last month to the alliance because it was likely to lead to ‘‘material, although not substantial’’ benefits to consumers.
But in that draft decision the regulator indicated that it intends to knock back the two airlines’ request for anti-trust approval to be granted for 10 years, deciding half that time-frame is more appropriate.
Aspects of the deal still needs approval from regulators in New Zealand and Singapore.
New Zealand’s Transport Minister, Gerry Brownlee, will decide whether the two airlines can extend their alliance to the trans-Tasman route.