17 Jan 2013

Qantas-Emirates allowed to prepare for deal

1:30 pm on 17 January 2013

Qantas and Emirates have permission from the Australian Competition & Consumer Commission to begin marketing and ticketing preparations for a proposed alliance.

AAP reports the ruling on Thursday allows the two airlines to begin preparations for a proposed tie-up. A final ruling from the ACCC is expected in March.

The proposed alliance involves an extensive codesharing arrangement, reciprocal frequent-flyer benefits and joint marketing, pricing and coordination on certain routes between the two carriers.

AAP reports it is regarded as a key plank of Qantas chief executive Alan Joyce's plan to turn around the airline's struggling international arm, which lost $A450 million in 2011/12.

"In making its decision, the ACCC has accepted written assurances from the parties that should the ACCC ultimately decide not to allow the alliance to go ahead, the airlines will accommodate consumers' bookings," said ACCC chairman Rod Sims.

In a statement, Mr Sims again raised concern about the impact of the alliance on routes between Australia and New Zealand, a matter first raised in a draft decision in December.

The ACCC believes a Qantas-Emirates alliance could reduce or limit capacity growth on Trans-Tasman routes, and 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," Mr Sims said.

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 said.