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The Australian Competition and Consumer Commission (ACCC) said on Wednesday it has decided to grant conditional authorization to an alliance between Qantas Airways Limited and Dubai's state-owned air carrier Emirates.
ACCC Chairman Rod Sims said the Qantas-Emirates alliance, which involves coordination of the airlines' passenger and cargo transport operations and other related services, is likely to benefit the public.
"The ACCC considers that the alliance is likely to result in public benefits through enhanced products and services offered by the airlines, and improved operating efficiency," Sims said in a statement.
"In particular, the alliance is likely to provide Qantas and Emirates customers with increased access to a large number of existing frequencies and destinations under a single airline code, improved connectivity and scheduling, and access to each alliance partner's frequent flyer programs."
Quantas and Emirates are scheduled to tie up in September.
He said the alliance is also likely to provide the airlines with more flexibility in managing their fleet.
"Taking all of this together, the ACCC is satisfied that the alliance is likely to result in material, but not substantial, public benefits," Sims said.
The authorization has been granted for five years, subject to conditions related to flights between Australia and New Zealand.
"The one exception is the trans-Tasman where Qantas and Emirates compete on four routes which accounted for around 65 percent of total passenger capacity between Australia and New Zealand in the year to June 30, 2012," Sims said.
"On these routes, the ACCC is concerned that Qantas and Emirates will have the ability and incentive to reduce or limit growth in capacity in order to raise airfares."
In order to address the concern, the ACCC has required the airlines to maintain their pre-alliance aggregate capacity on the four overlapping trans-Tasman routes.Enditem
