Australia’s competition watchdog has finally given the go-ahead to Qantas’ proposed joint venture with China Eastern.
This effectively reverses an earlier statement that the tie-up would be harmful to consumers.
The change of heart stems from assurances from China Eastern that it would increase frequencies between Australia and China and launch a new route.
"The ACCC considers that the addition of a significant number of new services and expanded range of destinations, reflecting this gateway strategy, would constitute a significant public benefit," said ACCC chairman Rod Sims.
The ruling calls for both carriers to increase capacity on current routes between Australia and Shanghai by at least 21% over the five-year term the joint venture has been authorised for.
The two airlines have an existing code share agreement for 17 weekly flights between Australia and mainland China, along with domestic destinations in both countries.
