Australia Dept of Infrastructure backs Qantas Airways and China Eastern Airlines alliance

Australia's Department of Infrastructure and Regional Development Aviation Industry Policy Branch GM Stephen Borthwick in a post-draft determination submission to Australian Competition and Consumer Commission Adjudications Branch GM Dr Richard Chadwick criticised (08-Apr-2015) the ACCC's draft decision to block a proposed joint coordination agreement between Qantas Airways Ltd and China Eastern Airlines Corporation Ltd stating the decision was "too narrowly focused''. Mr Borthwick argued that the proposed alliance would be "a positive for the Australian economy" and was "consistent" with government policy. He said: "As outlined in our previous submission, the agreement would benefit Australian consumers by improving coordination of schedules and frequencies; sharing frequent flyer benefits between the two airlines and allowing Qantas (QAN) to offer its customers better access to destinations within China by reducing connection times for onwards flight from Shanghai", adding: "It would result in added benefits by boosting Australia's tourism industry through increasing he ability for both airlines to market and sell tickets to Australian destinations." The submission suggested that a focus on the amount of market share held by the airlines on the Sydney-Shanghai route was too narrowly focused and it should instead look at the operations of the wider Australia-China market. "While the department notes that the evidence to suggest the Sydney-Shanghai route comprises relatively strong "point-to-point'' traffic, the commercial reality is that in any given market a hub airline will have significant market share on routes to and from that hub,'' it said, adding: "This should not in itself prevent the formation of immunised alliances with other carriers when consumer benefits can be showed to outweigh competitive impacts".