An application by Qantas to codeshare with Cathay Pacific on routes between Hong Kong and Australia faces further scrutiny from Australian authorities.
The International Air Services Commission has written to the Flying Kangaroo seeking more information on its application to codeshare and asking the Australian carrier to address the ministerial criteria relating to competition, tourism and trade.
The Australian Competition and Consumer Commission has also indicated it plans to make a submission on the application once it receives more information from the carrier.
IASC officials want Qantas to respond to concerns raised by Virgin Australia in a submission lodged earlier this week that the codeshare would be detrimental to travelers and increase the market power of the two airlines.
Virgin said in its application that Qantas and Cathay currently dominated the Hong Kong route, holding a combined frequency share of 88 percent and a combined seat capacity share of 90 percent.
READ: Virgin opposes Qantas-Cathay codeshare
It argued the Qantas application did not provide enough information for interested parties such as itself and the competition watchdog to properly assess and comment on the application.
“Notwithstanding the paucity of information in Qantas’ application, any strengthening of the cooperation with Cathay Pacific is likely to increase the market power that the two carriers individually and collectively hold on the Hong Kong route,’’ the Virgin application said,
“This would inevitably diminish the competitive forces in the market and may lead to higher airfares and reduced choices for customers, with corresponding implications for Australian tourism and
In a letter released Friday, IASC chair Ian Douglas asked Qantas to provide details on how the proposed codeshare would achieve the IASC Act objective of enhancing the welfare of Australians by promoting economic efficiency through competition in the provision of international air services.
He said this should result in increased responsiveness by airlines to the needs of consumers, including an increased range of choices and benefits; growth in Australian tourism and trade; and the maintenance of Australian carriers capable of competing effectively with airlines of foreign countries.
The letter asked Qantas to specify the city-pairs on which it proposed to codeshare with Cathay and provide passenger numbers and market share for each as well as yield and load factors.
Virgin calculated that in the 12 months ending October 2018, both airlines recorded passenger load factors exceeding 80 percent and together carried 92 percent of all passengers traveling between Australia and Hong Kong.
Qantas said it would be responding to the request for more information.
