Aviation

Qantas’ tie-up with China Eastern Airlines approved by ACCC

The Australian Competition & Consumer Commission (ACCC) has authorised Qantas and China Eastern Airlines to continue to operate an aviation alliance until 31 March 2023.

The two airlines entered into the original joint coordination agreement (JCA) in 2015 in order to coordinate flights between mainland China and Australia.

The ACCC granted conditional authorisation for Qantas and China Eastern on 21 August 2015, which permitted the alliance until 31 October 2020.

The airlines varied the JCA and were seeking an 18-month re-authorisation to extend the period of is operation to March 2022, given the crisis and market uncertainty created by the COVID-19 pandemic.

Qantas and China Eastern requested that the new authorisation be issued without conditions requiring the maintenance or growth of flight capacity during the authorisation period due to the current coronavirus-affected climate.

The airline’s current intention was to then seek a further extension of the authorisation beyond 2022 in the future, according to the ACCC.

In its final determination delivered late last month, the ACCC said it remains of the view that reduced competition between Qantas and China Eastern on the Sydney-Shanghai route as a result of the proposed JCA extension was likely to result in a “significant public detriment” in times of more normal levels of demand.

“However, the ACCC notes that current demand for flights between Australia and China is low, and there is uncertainty about the extent and timing of a recovery in demand that is likely to occur,” it said.

“Further, it is not apparent that if Qantas and China Eastern were operating independently of each other, there would be sufficient recovery in demand to fuel a strong return to the route for both airlines in the short term.

“As noted, the ACCC considers that the extended JCA will assist Qantas and China Eastern in reinstating services as demand picks up.

“For these reasons, the ACCC considers that the extent of any anti-competitive detriment that is likely to result from the applicants coordinating their operations on the Sydney-Shanghai route, or between Australia and China more broadly, is likely to be limited in the short term.”

“The applicants have sought re-authorisation until 31 March 2022. It now appears that the period of disruption to the aviation industry as a result of the COVID-19 pandemic is likely to be longer than was anticipated at the time the application was lodged.

“It is likely to take longer than originally anticipated for opportunities for travel between Australia and China to return to their pre-pandemic state. Therefore, the ACCC has decided to grant authorisation until 31 March 2023.”

The ACCC granted interim authorisation for Qantas and China Eastern to extend the JCA on 7 September 2020. The watchdog noted that this interim authorisation will remain in place until it is revoked or the date that its final determination comes into effect.


Featured image source: iStock/Warchi

SEE WHAT PEOPLE ARE SAYING

Leave a Reply

Aviation

Is former Virgin CEO Paul Scurrah set to fly back to Rex?

by Huntley Mitchell

Paul Scurrah has been laying low since exiting Virgin late last year, but the speculation wheel has started to turn around his next role.

Share

CommentComments

Travel Agents

“We need to address the elephant in the room”: travel agent implores government to make ‘that announcement’

by Linda Forster

An Aussie agent has waxed poetic about the travel industry’s struggles in this impassioned plea for the government to stop turning a blind eye.

Share

CommentComments

Cruise

Ponant appoints BDM for New South Wales and the ACT

The luxe cruise line has hired a new local BDM … as in a business development manager, not a basketball dunking master or a bad decision-maker.

Share

CommentComments

Aviation

Will you accept this flight? Stood-down Jetstar pilot becomes Australia’s new Bachelor

by Ali Coulton

After having his career put on hold by COVID-19, this super-handsome, self-professed romantic took the obvious course of action and became Australia’s newest Bachelor!

Share

CommentComments

Destinations

Australia takes out Tripadvisor award for world’s best beach

Your clients don’t need to travel internationally to check out this year’s winner, which is a relief, because they’d be waiting a while to visit if it was overseas.

Share

CommentComments

Events

MTA agents flock to the Gold Coast for long-awaited Virtuoso event

After a few false starts, the team at MTA have finally got their hands on the latest in luxury travel intel from Virtuoso.

Share

CommentComments

Travel Agents

Collapse of Helloworld agencies prompt urgent warning from business restructuring expert

Struggling travel companies are being urged to seek help before JobKeeper is wound back.

Share

CommentComments

Aviation

Flight forced to perform emergency landing after cat attacks pilot

Plane passengers have been left bemused and a bit ticked off after pilots were forced to turn their flight around due to a ferocious feline.

Share

CommentComments

Destinations

Hamish Blake and Zoe Foster-Blake return for Tourism Australia’s latest marketing push

Australia’s fave power couple are back to promote the country’s domestic tourism greatness.

Share

CommentComments

Tourism

STUDY: 86 per cent of Aussies back the ‘vaccine passport’

It looks like most of us are ready and raring to pack up our suitcases and jump on the next plane out of here.

Share

CommentComments

Cruise

Carnival is selling its very own cruise-themed Monopoly game

Unfortunately, even the mere mention of Monopoly is banned in the Travel Weekly office after “the incident”.

Share

CommentComments

Hotels

IHG outlines decade-long plan for sustainable tourism

Raise your KeepCup in delight at the hotel giant’s new spate of commitments to sustainable travel.

Share

CommentComments