Plans for a partnership between Qantas and China Eastern Airlines have hit a roadblock after the Australian Competition and Consumer Commission deemed the tie-up anti-competitive.
The ACCC plans to block the proposal by Qantas and China Eastern to coordinate services between Australia and China.
The carriers, which already codeshare, announced plans in November which could open up new routes between the countries.
The aim was to create a five-year joint venture to integrate the carriers’ operations at Shanghai.
ACCC chairman Rod Sims said the two airlines already have more than a 80% share of capacity on the Sydney-Shanghai route.
“They are the two major airlines on the route and the only airlines offering daily flights, and so the major competitive constraint on each other. Competition between them will be greatly reduced under the proposed agreement.” Sims said.
The ACCC also said connections beyond Shanghai would not necessarily be enhanced if the venture was approved.
Qantas International CEO Gareth Evans has rejected the ACCC findings.
“There are more than 20 airlines already providing services between Australia and mainland China and the sharp pricing on these routes demonstrates that the market is highly competitive,” Evans said.
