Carriers upset by codeshare rejection

Carriers upset by codeshare rejection
By admin


Qantas is studying the decision of the International Air Services Commission (AISC) to reject its plea to approve a codeshare with South African Airways beyond the end of the year.

The flag carrier today remained adamant that the agreement with SAA is in the interests of passengers while SAA said it will now “review its options”.

The final ruling to only grant approval for the codeshare until December 31, rather than the five years requested by the carriers, ratifies the draft decision issued by the IASC in November.

A Qantas spokesperson said: “We believe the code share arrangements are of benefit to the public and we are therefore disappointed that the Commission has indicated it will not approve them beyond the end of this year. We are studying the decision closely.”

Theunis Potgieter, SAA general manager commercial reiterated its long term commitment to Australia but added: “SAA will review its options and will announce any potential changes in due course.”

In making the ruling, the IASC concluded that competition on the route had deteriorated since 2010 following V Australia’s exit — which it partially blamed on the codeshare – and capacity reductions.

Qantas and SAA have an effective duopoly, it said, and face “little competitive constraint from third country airlines” or the threat of a new carrier.

Of “particular concern” was the difficulty confronting new entrants in competing with the combined market strength of Qantas and SAA may be “made worse by the codeshare”.

While rejecting longer term approval, the IASC did reduce the minimum number of weekly services from 14 to 10.

Email the Travel Weekly team at traveldesk@travelweekly.com.au

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