Qantas has made a last ditch effort to persuade Australia’s International Air Services Commission to overturn a decision not to grant a code-sharing expansion with Cathay Pacific.
The airline called out the ‘flawed’ logic in denying the new codeshare agreement.
It called for it to be reconsidered as the commission came to ‘inappropriate conclusions’ over the impact on market competition.
The IASC denied it as it believed it would ‘entrench and expand the market position of Qantas and Cathay to the detriment of Virgin Australia’s competitive position.’
Virgin had opposed it.
Qantas and Cathay had applied to expand an August 2018 agreement to include 15 one-way routes from Hong Kong operated by Cathay and subsidiary Cathay Dragon and 25 domestic routes operated by Qantas.
Qantas said the commission had a ‘narrow focus’ in determining the potential impact on competition, adding that it ‘would be marginal or non-existent in practice’ on point-to-point routes.
"In addition to placing insufficient weight in the broader "behind/beyond" nature of the proposed codeshare, the draft decision appears to adopt a view that the point-to-point Australia-Hong Kong routes are not currently charactersed by healthy competition and this will be exacerbated by the proposed codeshare,” Qantas said in its written submission.
"Evidence shows this is not the case. There is currently intense competition between the direct operators, Qantas, Cathay and Virgin Australia. The market is growing in terms of passenger volumes and capacity and airfares have been on a downward trend for many years."
Qantas argued the expanded codeshare is essential for the sustainable operation and market growth on Australia and Hong Kong routes.
