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  • Qantas argues Cathay codeshare will foster competition

Qantas argues Cathay codeshare will foster competition

Qantas has argued that the proposed extension of its codeshare arrangements with Cathay Pacific onto the Brisbane, Sydney and Melbourne to Hong Kong markets will help to open up competition across a broader range of international routes.

The Australian carrier made the argument in an additional submission to the International Air Services Commission, which is weighing up if it will grant the regulatory changes required for the codeshare to go ahead.

It also comes after Virgin Australia and the Australian Competition and Consumer Commission called for additional information on the codeshare arrangements to be made available, in order to allow them to make more substantive submissions before the commission makes its decision.

Qantas says the agreement with Cathay will only allow codeshare seats to be sold “in conjunction with through journeys to behind/beyond destinations”, and will prohibit each carrier from selling codeshare tickets solely between Australia and Hong Kong.

It also notes that the first stage of its codeshare partnership with Cathay has not allowed it to offer convenient connections to five destinations in India, a market that is expected to be a strong source of inbound tourism.

“This connectivity via Hong Kong and enhanced consumer choice would not be possible absent the Proposal and broader code sharing arrangements. In circumstances where Qantas does not operate to India, the commercial arrangements with Cathay and Cathay Dragon foster an environment in which Qantas can more effectively compete with large established operators,” it says.

Qantas also notes that the agreement is not exclusionary, and thus Cathay would still be able to codeshare on Virgin Australia’s services to destinations in Australia that are not served by the Qantas Group.

Additional information on yields and load factors on the Australia-Hong Kong routes were provided to the Commission, but were redacted in the publicly-available version of the submission.

Virgin, the ACCC and other interested parties have been invited to make submissions on the updated application by 25 February.

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