Qantas denied from ongoing links with China Eastern on Australia – Mainland China routes

Sydney, Australia - October 16, 2016: An Airbus A330 belonging to QANTAS takes off from the city's airport on an international flight. Minor heat haze.

The Australian Competition and Consumer Commission (ACCC) has issued a draft determination that will effectively deny Qantas and China Eastern (as well as their related carriers – e.g. Jetstar) from any ongoing coordination between Australia and mainland China.

The draft determination, which is seemingly a denial of a requested ‘extended joint coordination agreement’ between the carriers, was issued this morning, and will impact cargo operations between the two airlines until March next year.

“An agreement for coordination between two key competitors may breach competition laws,” the ACCC, said.

“At this stage we are not satisfied that the likely harm to competition from Qantas and China Eastern’s proposed coordination would be outweighed by any potential benefits,” commissioner, ACCC, Anna Brakey, said.

“We are concerned that the authorisation would provide Qantas and China Eastern with the opportunity and incentive to increase prices, compared to what they would charge absent the alliance, by limiting or delaying the introduction of additional capacity on the Sydney-Shanghai route as passenger demand continues to grow.”

China Eastern is, at this stage, the only airline that flies directly between Sydney and Shanghai.

Qantas plans to resume flights next month.

 

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