On 27 March 2013, the Australian Competition and Consumer
Commission (ACCC) granted authorisation for Qantas
Airways Limited (Qantas) and Emirates to
coordinate their operations pursuant to a Master Coordination
Agreement. The authorisation has been granted until 31 March
The alliance between Qantas and Emirates will involve
coordination of their air passenger and cargo transport operations
and related services (including line maintenance engineering
services and flight training for air crew and cabin crew), as well
as joint procurement of goods and services (such as aviation fuel).
The authorisation does not include coordination for the supply to
third parties of catering and aircraft cleaning services, being
services where coordination gave rise to competition concerns.
ACCC Chairman, Rod Sims, said that the ACCC, "considers
that the alliance would likely result in public benefits through
enhanced products and service offerings by the airlines, and
improved operating efficiency."
In particular, the ACCC granted authorisation on the basis that
the public benefits resulting from the alliance will outweigh any
negative impact on competition. The public benefits are expected to
include increased access to a large number of existing frequencies
and destinations (under a single airline code), improved
connectivity and scheduling, access to each alliance partner's
frequent flyer programs, and increased operating efficiency and
flexibility in the management of the aircraft fleet.
Taking this together, the ACCC was satisfied that the alliance
would likely result in material public benefits.
The ACCC expressed concerns, however, that the alliance would
negatively impact competition in regions where Qantas and Emirates
currently offer competing services. The ACCC concluded that,
overall, this impact would be minimal.
Importantly, the ACCC identified 4 trans-Tasman routes as those
where the alliance would be capable of unilaterally reducing or
restricting growth in capacity, with a consequent increase in
Accordingly, the authorisation also includes a condition that
Qantas and Emirates maintain, at a minimum, their pre-alliance
aggregated capacity on the 4 trans-Tasman routes where they both
operate services. This will be reviewed on 1 September 2015.
The authorisation decision is subject to a review period;
however, if no review application is brought, the decision will be
effective from 18 April 2013.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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