A proposal by Cathay Pacific and Qantas to extend their codeshare arrangement has been rejected by Australian authorities as not in the public benefit.
Australia’s International Air Services Commission found that the public benefits of the proposal were “substantially outweighed” by the public detriment.
The Hong Kong carrier and Qantas wanted to update an August 2018 agreement that allowed Qantas to add its code on 15 one-way routes beyond Hong Kong operated by Cathay or Cathay Dragon and Cathay to add its code on 25 one-way routes on Qantas’s domestic network.
The variation added another 19 one-way routes beyond Hong Kong on the Cathay/Cathay Dragon side and 32 one-way Australian domestic routes operated by Qantas.
READ: Aussies want EASA design standard review after Virgin ATR upset.
The bid had been opposed by Virgin Australia, which flies to Hong Kong from Melbourne and Sydney, and had raised concerns at Australia’s competition watchdog.
The IASC conceded the variation would result in some consumer benefits in terms of improved connectivity and a potential increase in route options.
“However, the commission also finds that the variation is likely to entrench and expand the market position of Qantas and Cathay Pacific to the detriment of Virgin Australia’s competitive position and the position of potential future entrants on the route,’’ it said.
“If this occurs it is likely to weaken competition on the route, leading to an increase in prices and /or a reduction of other benefits to consumers.”
Qantas had argued that the easier marketing of complex itineraries on a single airline code would be a key benefit to consumers but the commission found The Australian carrier already had the ability to codeshare on a range of Cathay flights beyond Hong Kong.
It said it was already possible for Qantas to offer a single airline code on these aircraft through Hong Kong to Australia. Cathay also had the ability to offer through-journey connectivity to passengers from Australia to various destinations via Hong Kong and vice versa.
“The marketing of complex itineraries is not dependent on the approval of this application,’’ it said.
