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Topic: QF And EK Deal Given Green Light
Username: ZKOKQ
Posted 2012-12-19 14:35:34 and read 6468 times.

The draft decision has been handed down this morning.

http://www.news.com.au/business/comp...light/story-fnda1bsz-1226540887811

Congratulations to Tim Clark and Alan Joyce.

Quote:

QANTAS' partnership with Emirates is set to receive approval from the competition watchdog.

In a draft decision handed down today, The Australian Competition and Consumer Commission (ACCC) said it would authorise an alliance between the two airlines for a period of five years.

"The ACCC considers that the alliance is likely to result in material, although not substantial, benefits to Australian consumers," ACCC Chairman Rod Sims said.

Qantas and Emirates had been seeking a 10-year approval from the ACCC, but Mr Sims said he had concerns about potential fare increases on flights between Australia and New Zealand.

The tie-up between Qantas and Emirates will involve a sharing of schedules, pricing and marketing on routes between Australia and Europe, the Middle East, North Africa, Asia and across the Tasman.

Mr Sims said it will lessen competition on some international routes, but competition from other airlines would mitigate that impact.

However, Qantas and Emirates could reduce or limit capacity on routes between Australia and New Zealand under their partnership, which could result in higher airfares, he said.

"Given the dynamic nature of the aviation industry, the limited extent of public benefits and the significant role of the trans-Tasman capacity condition in the ACCC's decision, the ACCC considers it appropriate to review this authorisation earlier than the ten years requested by Qantas and Emirates," Mr Sims said.

Approval from the ACCC provides Qantas and Emirates immunity from court action for conduct that raises concerns about competition.

Qantas and Emirates are seeking a final decision from the ACCC before the end of March 2013.

Read more: http://www.news.com.au/business/comp...da1bsz-1226540887811#ixzz2FXiGaWgb


[Edited 2012-12-19 15:18:22]

Topic: RE: QF And EK Deal Given Green Light
Username: fiscal
Posted 2012-12-19 14:48:34 and read 6412 times.

That is good news. I wonder when QF will be able to start adding FF seats that involve EK flights from PER?

Topic: RE: QF And EK Deal Given Green Light
Username: sydscott
Posted 2012-12-19 15:51:34 and read 6256 times.

http://www.businessday.com.au/busine...rings-attached-20121220-2bo2p.html

Great news for QF.

Quoting fiscal (Reply 1):
I wonder when QF will be able to start adding FF seats that involve EK flights from PER?

I would say they'll need to wait for the Singapore and New Zealand Regulators to give their blessing as well before they start loading seats on EK flights. But we've already seen MXP and MAN start to be added as codeshares and QF have just applied to the IASC to facilite the Italian capacity. January will start to see lots more activity! Very exciting news for QF.

Topic: RE: QF And EK Deal Given Green Light
Username: Zkpilot
Posted 2012-12-19 16:47:27 and read 6127 times.

Quoting sydscott (Reply 2):
I would say they'll need to wait for the Singapore and New Zealand Regulators to give their blessing as wel

Seeing as the ACCC has already banned them from cooperating on the Tasman I fail to see how the New Zealand regulators are relevant. Likewise the flights are going from Oz to EU via DXB so no need for Singapore regulators for those flights... only for the IIRC one code share flight via SIN...otherwise Oz pax will just fly to SIN on QF and other pax will fly direct from DXB as currently occurs.

Topic: RE: QF And EK Deal Given Green Light
Username: qf340500
Posted 2012-12-19 16:53:08 and read 6097 times.

Zkpilot, that with the Singapore Regulators was my thought as well, why do they need to give their approval to this whole thing?

Nevertheless, a great decision for QF, although now my favourite QF flight SIN - FRA is gone...

But SIN MEL should be still doable on QF / EK, i hope they will still have Premium Economy on this route

Topic: RE: QF And EK Deal Given Green Light
Username: NZ107
Posted 2012-12-19 17:38:22 and read 5951 times.

Quoting Zkpilot (Reply 3):
Seeing as the ACCC has already banned them from cooperating on the Tasman I fail to see how the New Zealand regulators are relevant.

I didn't read it in that light.. It sounded more like they can co-operate; although they have to comply with regulations to do with capacity. Either way, it would sound rather contradictory if NZ/DJ could form an alliance but EK/QF couldn't. I'm not too sure if they took 5th freedom rights into consideration because AFAIK, there has been no increase in the agreement between NZ and UAE from the 4 daily flights they have currently; and hence EY could never start trans Tasman flights until they were given extra slots.

Topic: RE: QF And EK Deal Given Green Light
Username: Quokkas
Posted 2012-12-19 18:05:56 and read 5887 times.

Quoting Zkpilot (Reply 3):
the ACCC has already banned them from cooperating on the Tasman

In a television interview Rod Sims said that this decision did not prevent co-operation between EK and QF but is proposing a condition to restrict the ability of the airlines to reduce or limit capacity on these routes in order to lift airfares.
http://www.abc.net.au/news/2012-12-2...proval-for-qantas-emirates/4437422

Topic: RE: QF And EK Deal Given Green Light
Username: aerokiwi
Posted 2012-12-19 20:28:34 and read 5651 times.

Quoting Quokkas (Reply 6):
In a television interview Rod Sims said that this decision did not prevent co-operation between EK and QF but is proposing a condition to restrict the ability of the airlines to reduce or limit capacity on these routes in order to lift airfares.

But as ever with these approvals, it doesn't stop them from zero capacity growth... in a growing market. So effectively you find there will be reduced capacity over the five years - fares will rise.

Topic: RE: QF And EK Deal Given Green Light
Username: lightsaber
Posted 2012-12-19 20:38:38 and read 5620 times.

Wow. Quicker than I expected. This is good news for QF and EK. Most of what they want to do is now 'greenlighted.'

I'm curious what further growth QF might do from DXB. e.g, flights to SE Asia (QF already has code-share rights, but why not expand on their own metal).

Question (I admit I'm being lazy), does QF have rights to fly via the mid-east to secondary cities in Malaysia or Indonesia? That seems to be a BIG hole in EK's route map and I've wondered if there lack of expansion is due to bilateral rights? (Note, I'm asking a question.)

Quoting Zkpilot (Reply 3):
only for the IIRC one code share flight via SIN...

   That isn't exactly much of an impact to the alliance...

Quoting Quokkas (Reply 6):
but is proposing a condition to restrict the ability of the airlines to reduce or limit capacity on these routes in order to lift airfares.

Interesting. Than you for the link.

Quoting aerokiwi (Reply 7):
But as ever with these approvals, it doesn't stop them from zero capacity growth... in a growing market. So effectively you find there will be reduced capacity over the five years - fares will rise.

That shouldn't be of worry. In a low to no expansion scenario, if there is money to be made narrow bodies will fill that duty. If anything, regulators would want a dominant alliance to execute that strategy; it ensures customers go to competitors who will meet the growth needs.

Lightsaber

Topic: RE: QF And EK Deal Given Green Light
Username: mariner
Posted 2012-12-19 20:46:38 and read 5600 times.

Quoting ZKOKQ (Thread starter):
Qantas and Emirates had been seeking a 10-year approval from the ACCC, but Mr Sims said he had concerns about potential fare increases on flights between Australia and New Zealand.

I am always slightly surprised by the power given to bureaucrats in a market situation.

I thought the original ten years was sensible - five years leaves an enormous uncertainty about the future hanging over it. Give 'em the ten and if they are "naughty" threaten to take it away.

And that the New Zealand routes are the reason for the Five Year Plan I think is bizarre - it sounds like the Soviet Union.

The Commissioner said: “This is a serious tie-up between two major competitors on the routes to Europe" - so If there is concern about the NZ routes, carve 'em out, make them a separate issue. Don't hold the whole thing hostage to 'em.

But hey, despite his Grinch-like headline, Ben Sandiliands saw some merit in the ruling (and some possible unhappiness at Virgin Australia/Air NZ), so I guess there's an upside to everything.  

mariner

Topic: RE: QF And EK Deal Given Green Light
Username: aerokiwi
Posted 2012-12-19 20:55:43 and read 5586 times.

Quoting lightsaber (Reply 8):
That shouldn't be of worry. In a low to no expansion scenario, if there is money to be made narrow bodies will fill that duty. If anything, regulators would want a dominant alliance to execute that strategy; it ensures customers go to competitors who will meet the growth needs.

Yes it should. The Tasman market is a prime example of one that grows with price stimulation. Equally, it will grow with population/economic growth, albeit more slowly than with a truly competitive environment.

But with a duopoly it will enable the airlines to refrain from capcity increases to boost yield. Great for them, bummer for passengers. Judging from past behaviour and the airlines' eagerness to effectively merge to eliminate competition, I'd suggest this is their preferred approach.

And I don't want a wait-and-see appraoch, becuase if/when they do operate duopolistically, the customer loses (while waiting to see). I want maximum competition, all of the time.

Topic: RE: QF And EK Deal Given Green Light
Username: gemuser
Posted 2012-12-20 01:30:24 and read 5263 times.

Quoting lightsaber (Reply 8):
Question (I admit I'm being lazy), does QF have rights to fly via the mid-east to secondary cities in Malaysia or Indonesia?

I don't know for sure, but I doubt it. Up to this year ALL Australian bi-laterals with SE & South Asian countries were about transiting to Europe, so I doubt there is much there about secondary cities, they didn't really fit into that scheme.

QF do have rights from India to the Middle East, but once again its in the context of transiting to Europe, so I don't know if it could be used with EK.

Gemuser

Topic: RE: QF And EK Deal Given Green Light
Username: mdavies06
Posted 2012-12-26 20:22:22 and read 2740 times.

http://www.businessweek.com/news/201...ussie-tourism-as-british-stay-home

An interesting article about how China is now the biggest contributor to Australia tourism growth

Perhaps in 10 years time we will say that it is EK who has been saved by this deal?

[Edited 2012-12-26 20:22:50]

Topic: RE: QF And EK Deal Given Green Light
Username: EK413
Posted 2012-12-26 22:49:20 and read 2565 times.

Quoting mdavies06 (Reply 12):
http://www.businessweek.com/news/201...ussie-tourism-as-british-stay-home

An interesting article about how China is now the biggest contributor to Australia tourism growth

Perhaps in 10 years time we will say that it is EK who has been saved by this deal?

I'm not sure as to what your implying but the deal will save QF from the stiff Asian competition... The tie up will allow QF to concentrate on routes which have been neglected for to many years in mainland Asia...

EK413

[Edited 2012-12-26 22:50:27]

Topic: RE: QF And EK Deal Given Green Light
Username: mdavies06
Posted 2012-12-27 17:01:26 and read 2135 times.

I reckon that the deal has allowed EK to get as much market share as it can in a potentially stagnant market whilst market growth shift to China where EK can't naturally serve from Australia.


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