Alliance all clear for Qantas, Emirates
The future of Qantas' international business has become "much brighter" with the competition regulator's authorisation of its partnership with Emirates, according to chief executive, Alan Joyce.
Speaking as the Australian Competition and Consumer Commission gave the alliance approval for a five-year period, Joyce also highlighted the benefits of the deal for Australian travellers and local tourism.
"Customers are already responding very strongly to the joint network that Qantas and Emirates have built, and to the frequent flyer benefits that extend across it, with a significant increase in bookings," he said.
The partnership will see the two carriers coordinate on passenger and cargo transport operations, offering a combined total of 98 flights per week between Australia and Dubai. In total, 65 one-stop destinations in Europe, North Africa and the Middle East will be accessible from the Dubai hub.
Qantas will continue to operate daily flights from Melbourne and Sydney through to London via Dubai.
Emirates president Tim Clarke described the alliance as "game-changing".
"Dubai is a leading global hub and through it, our two airlines will connect Australia to Europe, the UK and Northern Africa more smoothly than ever before," he said.
On approving the tie-up, ACCC chairman Rod Sims said its "enhanced products and service offerings" and "improved operating efficiency" were likely to benefit the public. It will also provide the carriers with "increased flexibility" to manage their fleets, he added.
But he highlighted competition concerns in areas where both airlines offer competing services.
Competitive constraints in most of these regions minimised the detriments, according to Sims. But he identified trans-Tasman routes as the "one exception" with Qantas and Emirates competing on four routes, accounting for 65% of capacity between Australia and New Zealand in the year to June 30, 2012.
"Of these routes, the ACCC is concerned that Qantas and Emirates will have the ability and incentive to reduce or limit growth in capacity in order to raise airfares," Sims said.
As a result, the regulator has ordered the airlines to maintain their pre-alliance capacity on all four over-lapping routes, subject to review.
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