Regulators move to block Qantas and China Eastern Airlines tie-up
Plans for a partnership between Qantas and China Eastern Airlines have hit a roadblock after the Australian Competition and Consumer Commission deemed the tie-up anti-competitive.
The ACCC plans to block the proposal by Qantas and China Eastern to coordinate services between Australia and China.
The carriers, which already code share, announced plans in November to open up new routes between the countries.
The aim was to create a five-year joint venture to integrate the carriers’ operations at Shanghai.
ACCC chairman Rod Sims said the two airlines already have more than a 80% share of capacity on the Sydney-Shanghai route.
“They are the two major airlines on the route and the only airlines offering daily flights, and so the major competitive constraint on each other. Competition between them will be greatly reduced under the proposed agreement,” Sims said.
The ACCC also said connections beyond Shanghai would not necessarily be enhanced if the venture was approved.
Qantas International CEO Gareth Evans has rejected the ACCC findings.
“There are more than 20 airlines already providing services between Australia and mainland China and the sharp pricing on these routes demonstrates that the market is highly competitive,” Evans said.
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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