AFTA push to call time on Qantas and Emirates tie-up

Sydney, Australia - October 7, 2013: Emirates Cargo Boeing 777 cargo aircraft passing a Qantas 767 on the tarmac at Sydney Airport.

The Australian Federation of Travel Agents (AFTA) has made a submission to the Australian Competition and Consumer Commission (ACCC) raising concerns that the partnership will do nothing to help abate the rising cost of airfares.

The agreement between to industry heavyweights means that they can work together to coordinate pricing, schedules, sales and tourism marketing on selected routes and the airlines are seeking a five year renewal on their 10 year standing agreement.

For passengers, the agreement provides benefits such as Qantas passengers earning frequent flyer points on routes that the airline does not fly as well as the opportunity to use Emirates airport lounges. Qantas records show that in 2018/19 118,00 passenger segments were redeemed and travelled on Emirates, up from 61,000 in 2013/14.

AFTA say that the tie-up means two airlines will hold over 50 per cent of the market routes to Auckland and the United Kingdom and were also concerned that airlines were holding back some types of fares from competitive distribution to drive traffic to their own websites, “This activity is enabling airlines to become the sole price makers and therefore increase the margins on their cheapest products with no pressure from the market.”

In Qantas’ submission, the airline focused on the public benefits the partnership offer like access to a larger travel network and the ability for more frequent flyer redemptions, noting that without the partnership both businesses would be at a commercial disadvantage.

Qantas was also looking for a one year extension of a similar partnership with China Eastern Airline with the goal to extended on a longer arrangement from March 2024.

AFTA raised similar concerns to this proposal, saying it did not create any incentive for “much needed increases in capacity”, and without it, Qantas would be more likely to operate its own services to China, increasing flight options for travellers.

Qantas international capacity was at about 70 per cent of pre-COVID levels, according to the airline’s last market update in late November 2022 and it is tipped that these partnerships will continue to cause issues between airlines at AFTA.

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