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Thursday, December 20, 2012

ACCC give conditional approval to QF/EK alliance

The ACCC has conditionally approved the tie up between Qantas and Emirates.

The two airlines had been seeking a ten year alliance to operate flights from Australia, Europe & Africa through the Dubai hub, joint marketing in intertwining the two frequent flyer programs and reciprocal access to lounges and priority benefits.  However one of the conditions imposed in the ACCC ruling is this deal will only be approved for five years.

In handing down his decision, ACCC Chairman Rod Sims said "The considers that the alliance is likely to result in material, although not substantial, benefits to Australian consumers."
Sims pointed out that while "the alliance is likely to result in some public detriments through its effect on competition where Qantas and Emirates currently offer overlapping services. In most of these regions there are factors which are likely to mitigate the public detriment, including continuing competition from a number of established airlines."
The ACCC also flagged a potential drawback for trans-Tasman travellers, saying that "on overlapping routes between Australia and New Zealand the ACCC is concerned that the alliance may have an increased ability and incentive to reduce or limit growth in its capacity in order to raise airfares. Therefore, the ACCC is proposing a condition to restrict the ability of the alliance in this regard."
Now that the ACCC has given draft approval for Australian flights all eyes are being turned towards New Zealand transport minister Gerry Brownlee who will decide if Qantas & Emirates are able to form an alliance on the trans-tasman network.

Read more on the ACCCs decision and how it will impact Qantas, Emirates and travelers from any of the following sources
Brisbane Times HERE
Australian Business Traveller HERE, HERE or HERE
Australian Aviation HERE 

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