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China presses ACCC to let national airlines grow closer

June 2, 2015 Aviation, Headline News No Comments Email Email

egtmedia59The Government of China is the latest to argue that the Australian Competition and Consumer Commission (ACCC) should drop its objections to a deeper alliance between Qantas and China Eastern, and instead take into account the bigger picture.The ACCC has signalled it will block the alliance. In a draft decision in March, the ACCC said it proposed to deny authorisation for Qantas and China Eastern to coordinate their operations between Australia and China under a proposed Joint Coordination Agreement.

In April, Qantas and China Eastern landed a heavyweight submission with the ACCC, arguing that if the regulator goes ahead and rejects the two airlines’ Banner-Family(JPG)250x250proposed alliance, it could greatly damage Qantas operations in China.

That, in turn, would damage Australian tourism and trade, their submission maintained.

In the latest submission, China’s ambassador to Australia, Ma Zhaoxu, suggests the ACCC “bear in mind the interests of our overall relationship and make a fair and reasonable decision”.

“It will not reduce competition or lead to monopoly, but rather serve the interests of consumers.”

The ambassador made reference to the free-trade agreement between China and Australia, signed last year, and the decision in January to triple air capacity between the two countries over the next three years.

Tourism bodies, including lobby groups like the TTF, Tourism Australia, an airport, state authorities and a major pilots’ association have already urged the ACCC to do a U-turn and approve the proposed deeper alliance. See: Tourism industry swings behind Qantas/China Eastern

Qantas chief executive Alan Joyce argues the partnership would bring benefits to consumers and the airlines.

“The whole intention of this partnership is to grow, that’s what we’re aiming to do,’’ Joyce said. The Chinese Ambassador agrees with him.

There’s still some time to go – the ACCC has extended until 31 August 2015 the deadline for a decision on the Qantas-China Eastern proposal.

Written by Peter Needham

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