Qantas CEO Alan Joyce, right, and Emirates President Tim Clark announcie a global aviation partnership. AP Photo/Rob Griffith Source: AP
QANTAS has been given approval to form a crucial international alliance with Emirates airline, in a move the flag carrier says will help secure the future of its struggling international arm.
The Australian Competition and Consumer Commission said today it was satisfied the public would benefit through easier access to more destinations and improved scheduling.
However, the ACCC raised concerns about four trans-Tasman routes where Qantas and Dubai-based Emirates together carry about 65 per cent of all passengers.
The watchdog imposed special conditions on those routes that require the airlines to maintain and potentially increase capacity in the future.
But overall the ACCC, which granted interim approval in January for alliance to allow the airlines to start selling tickets, said the benefits of the deal outweighed any loss of competition.
"The ACCC considers that the alliance is likely to result in public benefits through enhanced products and service offerings by the airlines, and improved operating efficiency,'' ACCC chairman Rod Sims said.
Mr Sims said there was likely to be a detrimental impact on competition in regions where Qantas and Emirates both currently operate.
"However in most of these regions, the ACCC has identified competitive constraints which mean that these detriments are likely to be minimal," Mr Sims said.
Qantas and Emirates plan to be in an alliance for 10 years, but the ACCC was only willing to grant approval until 2018, when the deal will again be reviewed.
Qantas today welcomed the decision, which chief executive Alan Joyce has said is key to the long-term viability of its struggling international arm.
The international business has been the drag on the company, chalking up a loss a $91 million loss in the six months to December.
"Qantas is an Australian icon and the future of its international business is much brighter with this partnership,'' Mr Joyce said today.
"Customers are already responding very strongly to the joint network that Qantas and Emirates have built, and to the frequent flyer benefits that extend across it, with a significant increase in bookings."
Under the partnership, Qantas will use Dubai, rather than Singapore, as the carrier's stopover point for its flights to London.
Qantas and Emirates will offer a combined total of 98 flights a week between Australia and Dubai, with Qantas continuing to operate daily services from Melbourne and Sydney through to London.
Emirates airline president Tim Clark said he was pleased to be able to move ahead with the Qantas alliance.
"This is a truly game-changing partnership that brings together two of the world’s best airlines and offers some of the highest quality travel experiences," he said.
The first Qantas flight to London via Dubai departs on Sunday, March 31.
Qantas shares opened for trading this morning at $1.72.
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