The Week in Focus: IASC under fire

The Week in Focus: IASC under fire
By admin


As stories go, it was hardly worthy of mention. One member of the public, who wished to remain anonymous, writing to the International Air Services Commission and calling for the board to resign.

Yet whoever it was, you could see their point.

The ire felt by the mystery follower of aviation news concerned an IASC draft ruling which gave Qantas and South African Airways permission to codeshare until the end of 2014.

Beyond that date, the IASC said it was conceivable that, should current passenger demand continue to rise, both carriers could offer competing services from Sydney and Perth or that another carrier may enter the market.

But while approval will end 15 months earlier than Qantas and SAA wanted, it was a whole lot better than the IASC’s previous final decision – that the codeshare would not continue beyond the end of this year.

That, however, was challenged by Qantas who lodged a judicial review, later withdrawn after the airline was “invited” to resubmit its codeshare application.

The IASC does not reach decisions lightly. It invites submissions, analyses market data and thoroughly scrutinises the pros and cons of an application before making its ruling.

While Qantas was clearly within its rights to disagree with the conclusions and appeal, it’s hard not to sympathise with the author’s view that the IASC did not have the courage of its convictions and buckled at the first hint of a legal challenge.

Nevertheless, even extending the original decision by two years did not get the IASC off the hook. Qantas, responding to the draft ruling, accused the regulator of “almost wilfully misunderstanding” the commercial realities of the codeshare arrangement. I’m not sure we’ve heard the last of this.

Still with Qantas and its decision to withdraw an application for interim authorisation for its alliance with Emirates is an interesting one.

The airline said it had taken a conservative approach to the issue but was now “comfortable” it can do a significant amount of preparatory work without formal approval from the competition regulators.

Central to that is the re-routing of Qantas’s London-bound flights from Singapore to Dubai which will happen irrespective of whether the alliance is approved or not.

But the alliance gang of Virgin Australia, Air New Zealand and Singapore Airlines, who all urged the Australian Competition and Consumer Commission to block interim authorisation, will this morning no doubt be feeling they have drawn first blood.

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