The ACCC is granting re-authorisation to an alliance between Qantas Airways Limited (ASX: QAN) and Emirates for a further five years, subject to a condition.

The global alliance covers Qantas and Emirates’ air passenger and cargo transport operations. The terms of the authorisation granted are largely unchanged from last month’s draft decision.

“The continued coordination by Qantas and Emirates of their air passenger and cargo transport operations will likely lead to a range of public benefits such as improved connectivity and loyalty program benefits,” ACCC Commissioner Roger Featherston said.

The ACCC has imposed a condition of authorisation to address continuing competition concerns on the Sydney – Christchurch route.

“The alliance must report to the ACCC on seats and passengers flown, fares and route profitability on routes between Australia and New Zealand. The condition allows us to set a minimum level of capacity on the Sydney to Christchurch route at any time, if needed,” Mr Featherston said.

Further information about the application for authorisation is available at Qantas Airways Limited and Emirates.

Background

The ACCC first authorised the alliance in 2013 for five years, subject to conditions on trans-Tasman routes.

Qantas and Emirates are seeking re-authorisation for a Restated Master Coordination Agreement under which they will continue to coordinate their operations, including in relation to: planning, scheduling, operating and capacity, sales, marketing, advertising, promotion, and pricing for passengers, freight customers and agents, connectivity and integration of certain routes, codeshare and interline arrangements, frequent flyer programs and all aspects of customer service (including ground services and lounge access).

Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.