Australia’s competition regulator has given Qantas more time respond to its draft ruling blocking the airline’s proposed alliance with China Eastern.
The Australian Competition and Consumer Commission’s (ACCC) had indicated it intended to block the proposed alliance in a draft ruling on March 24, and submissions in response to that determination were due by April 8.
However, the ACCC has agreed to a Qantas request to push back the deadline for submissions in response to the draft determination until April 24 in order to provide enough time for the airline to make a submission.
The ACCC has also extended its consultation period for the proposed alliance until August 31, meaning it is likely to be at least September before a final decision is made. Qantas and China Eastern unveiled their proposed tie-up in November 2014.
“The ACCC considers that an extension is appropriate to provide sufficient time for Qantas to provide a submission and for the ACCC to consider the additional information Qantas proposes to provide,” the ACCC said in a letter to Qantas and China Eastern dated April 16.
Qantas and China Eastern have agreed to the extension.
Government and industry representatives have come out against the ACCC’s draft ruling and urged the regulator to reconsider.
The Department of Infrastructure and Regional Development’s aviation industry policy branch general manager Stephen Borthwick’s submission said there was “no reason to deny the proposed coordination agreement”.
Federal Member for Leichhardt Warren Entsch’s submission said the tie-up would allow Qantas to effectively compete and build capacity within the Australia-China market.
“I respectfully request that the ACCC reconsider this draft determination and support the proposed partnership,” Entsch wrote.
“Regardless of the outcome of this review Qantas assures me that they will remain committed to the Chinese market however it cannot be denied that without this authorisation they will be at a significant disadvantage.”
State and federal tourism bodies have also written to the ACCC urging it to reverse course and give alliance the green light.
The ACCC draft ruling argued the partnership would result in “significant public detriment”, given Qantas and China Eastern currently had about 83 per cent of all seats between Sydney and Shanghai and the proposed alliance would give them an “increased ability and incentive to limit capacity and/or increase airfares” on the route.