Will Qantas dare to pull out of duopoly with SAA?
South Africa’s tourism minister Marthinus Van Schalkwyk has indicated that if Qantas pulls out of its tie-up with South Africa Airways for services between Australia and Johannesburg, another airline would replace the Australian flag carrier “within a week”.
“I can guarantee it,” said Van Schalkwyk.
Qantas has warned aviation authorities that ending code-share services between Australia and Johannesburg is likely to lead to one of the airlines not flying the route.
The International Air Services Commission has told the airlines – which hold a duopoly on direct services to South Africa – that it is unlikely to extend its code-share beyond this year.
The Commission also wants to stop the airlines from ”reducing capacity in order to cut costs and drive up load factors and fares”.
Qantas said the withdrawal of approval at the end of the year would ”likely result in monopolies for direct services on both the Sydney and Perth routes” to South Africa.
Qantas also said if the deal was not extended the incumbent carriers would reduce services or withdraw entirely from the route. Qantas wants the commission to approve the tie-up for five years.
MOLE VIEW: South Africa’s tourism minister did not name the airline he expected to step up if Qantas withdrew from the code-share, although there is strong speculation that the minister was referring to Virgin Australia.
The chances of that happening are slim. Qantas is posturing before the International Air Services Commission has to make a decision on the code-share extension.
South African Airways and Qantas have the route to themselves and Qantas would not willingly hand over the spoils to a rival. Especially if that rival is Virgin Australia.
By Ian Jarrett
Ian Jarrett
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