Aviation

ACCC and Virgin voice concerns over Qantas-Cathay Pacific codeshare expansion

Australia’s competition watchdog and Virgin Australia have argued against the proposed codeshare expansion between Qantas and Cathay Pacific.

Under the proposed agreement, Qantas will add its code to an additional 19 one-way routes operated by Cathay/Cathay Dragon from Hong Kong to India, Japan, South Korea and Sri Lanka.

Qantas will also add its code to select Cathay services from Hong Kong to Sydney, Melbourne and Brisbane, where passengers are connecting to a Qantas Australian domestic service.

In return, Cathay, will add its code to an additional 32 one-way domestic Australian routes operated by Qantas.

The airline will also add its code to select Qantas services from Sydney, Melbourne and Brisbane to Hong Kong, where passengers are connecting to a Cathay/Cathay Dragon service to another destination in Asia.

The application lodged by Qantas on 8 January 2019 is seeking approval from the International Air Services Commission (IASC) for Cathay to the last part of the deal.

Qantas and Cathay do not require approval from the IASC to engage in the other three elements of the proposed expanded codeshare arrangement.

The Australian Competition and Consumer Commission (ACCC) noted in a letter to the IASC that its main competition concern around the proposed deal is that “the conduct may soften competition in the Australia-Hong Kong market by making it easier for Qantas and Cathay to coordinate their price and capacity decisions so as to raise price (or reduce service) for Australia-Hong Kong passengers who connect with a domestic Australia flight and/or a flight between Hong Kong and places in Asia”.

“For example, this may include delaying the deployment of additional capacity between Australia and Hong Kong,” the ACCC’s general manager of adjudication, David Jones, wrote.

“If the IASC decides to approve the variation of the determination, we consider it would be prudent for the IASC to closely monitor Qantas and Cathay’s behaviour on the route and Virgin Australia’s response.

“In doing so, the IASC may wish to monitor the carriers’ load factors, capacity flown, yield, and route profitability, as well as take-up of available spare capacity on the route, including by Virgin Australia.”

In a separate submission to the IASC, Virgin Australia said the material provided by Qantas to support its proposed codeshare agreement with Cathay was “insufficient to demonstrate that it would be of benefit to the public or promote the object of the [International Air Services Commission] Act”.

“Any marginal benefits to be delivered by the application would be completely offset by the corresponding detriment to competition, tourism and trade that would occur through permitting code share services on routes operated in parallel by the dominant carriers on the route,” wrote Lee-Anne Tomkins, head of government and international relations at Virgin Australia.

“Relevant precedent on the Papua New Guinea, Japan and South Africa routes provides clear support for this view. Accordingly, there are insufficient grounds to justify the variation of Determination [2015] IASC 115.”

SEE WHAT PEOPLE ARE SAYING

Leave a Reply

You must be logged in to post a comment.

Hotels

Hotel wrap: Choice Asia-Pac’s new look, Accor Korea’s Sofitel in Seoul, Crown’s bad news + MORE!

Delightful, informative and neat around the edges – this is how to describe this week’s hotel wrap, and Travel Weekly’s reporter when he sucks in his love handles.

Share

CommentComments

Technology

Webjet boss lauds “outstanding” FY19, as full-year profit jumps 45 per cent

by Huntley Mitchell

There’s a whole lot of jumping going on over at Webjet HQ today, both in a financial and celebratory sense.

Share

CommentComments

Aviation

Air New Zealand’s profit plummets, interim CEO appointed

by Huntley Mitchell

Air New Zealand has posted a big drop in profit for the 2019 financial year, as well as providing an update on its hunt for a new boss.

Share

CommentComments

Destinations

German amusement park shuts down ‘swastika’ ride

by Christian Fleetwood

After reading this, you’ll wonder how in all of God’s grace a ride as potentially offensive as this one ever made it into production.

Share

CommentComments

Destinations

Dead Queensland uranium mine an Instagram hotspot for local tourists

Local tourists are flocking to this old mine for the perfect shot, thanks to its unnaturally blue and picturesque water.

Share

CommentComments

Aviation

Aerocare hits back at TWU over airport worker protest

It looks like things are heating up between the Transport Workers Union and a major employer of airport workers. You’re gonna want to get the popcorn ready for this one.

Share

CommentComments

Aviation

Qantas announces big Project Sunrise news, as full-year profit falls

by Huntley Mitchell

Qantas has cleverly masked its full-year profit drop with a bit of positive news about Project Sunrise.

Share

CommentComments

Travel Agents

“Soft” and “disappointing”: Flight Centre laments struggling Aussie leisure business

by Huntley Mitchell

Do you work at Flight Centre and find it hard to take criticism? If so, it might be best you skip reading this story.

Share

CommentComments

Wholesalers

TTC introduces new and improved loyalty program

ATTENTION LOYALTY PROGRAM JUNKIES! The Travel Corporation has introduced some new perks you’re going to want to take advantage of. Check them out right here.

Share

CommentComments

Road & Rail

Road & rail wrap: Europcar fined over credit card fees, Railway Adventures’ Sri Lanka initiative + MORE!

Toot toot, chugga chugga! It’s the road and rail wrap! Get amongst all the latest overland news and deals while we desperately try to avoid being sued by The Wiggles for using their trademark toots and chuggas.

Share

CommentComments

Destinations

Does Donald Trump really want to buy Greenland?

Apparently Donald Trump (aka POTUS) is interested in buying Greenland. Find out just how true (or untrue) the reports are here.

Share

CommentComments

Events

Technology

“It has given our business a new element of trust”: Experience Oz on winning at last year’s travel awards

With the entry deadline for the The Travel Awards 2019 closing soon, we thought we’d give you a little inspiration in the way of an interview with one of last year’s winners.

Share

CommentComments