Transtasman air fare competition safe – for now

There’s no  immediate prospect that competition will be reduced on transtasman air routes by the Emirates-Qantas alliance

As expected, the Australian Competition and Consumer Commission has approved the alliance, following on from  a draft decision in December.

That decision raised concerns about the impact of the alliance on routes between Australia and New Zealand.

It was feared Emirates and Qantas would reduce their current capacity or limit future growth, thus forcing up fares.

In its latest decision, the ACCC says it has sought more information from the two airlines and the industry on the issue.

"The ACCC is granting interim authorisation on the condition that the applicants do not engage in the conduct for which authorisation is sought in relation to services between Australia and New Zealand," chairman Rod Sims says.

The ACCC's interim authorisation may be reviewed at any time, and should not be seen as an indication of whether final approval will be approved or not, he says.

At present, Emirates provides strong competition to both Air New Zealand-Virgin Australia and Qantas-Jetstar on transtasman routes from Auckland and Christchurch to Brisbane, Melbourne and Sydney.

The primary impact of the alliance is to divert the “kangaroo route” from Singapore to Dubai, giving Qantas passengers access to all flights from Emirates’ hub to destinations in Europe (33 in all) as well as the Middle East, central Asia and Africa.

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