Is it time for the ACCC to lose its power to veto international JVs?

[RooFlyer]

There's quite a bit of misinformation and mistruths being peddled in this thread

Oh, that's for sure!:

Every single JV proposal from QF has included more QF-metal flights to existing destinations and/or opening up of new QF-metal destinations.

How many Qantas metal flights are there to Dubai today, compared to when their 'JV" was signed? Like you said ...

I maintain my belief that this all isn't serious.

 

[RSVKanga]

How many Qantas metal flights are there to Dubai today, compared to when their 'JV" was signed? Like you said

I knew you would bring this up.

Based on consumer behaviour, the old QF1/QF9 were not really flights to Dubai, they were flights to London with a stopover and more than 85% of passengers on those QF flights had LHR as their final destination. You should have known that. The switch to DXB was unpopular for QF's main customer base made sense to switch back to SIN which has strong demand and popularity not just for LHR/Europe; it was just a matter of QF listening to customers.

There are a lot of people who fly just to SIN on QF1, and of course, PER-LHR is the most profitable route in QF's 103-year history.

I maintain my belief that this all isn't serious.

You do you.

 

[kookaburra75]

There's quite a bit of misinformation and mistruths being peddled in this thread and it's important that everyone is aware of the facts and doesn't just assume based on what a few anti-QF and anti-Australia forces say online and in public.

Oh, that's for sure!:

You're getting soft in your old age - but then, so am I <redacted>

 

[Quickstatus]

Five out of those seven airlines you listed indeed have unlimited traffic rights into Australia

Im sure the CL subcomittee in Govt can negotiate the rest.

Sydney-Shanghai A330 killed by ACCC after MU JV decision.

Book flights directly on MU.

Cairns-Tokyo QF 787 killed by ACCC after JAL JV decision

Yes, in other words, 2 dominant player trying to increase their market power.
Before Rona QF/JQ had the dominant market share -some reports say between 60-75% of non stop traffic between AUS and JPN.
And using the 787-9 for a medium haul out of CNS which is primarily a leisure route does not make sense.

Does QF even have spare 787-9?
Edit: the A321-XLR on the other hand.....

Nothing preventing QF/JL and QF/MU resubmitting their ACCC application for a NON Joint Venture partnership. Make it am arms length free sale codeshare arrangement or just have an interline agreement for passengers connecting between QF and JL/MU. Oh wait >>> QF/JL are part of the OneWorld Alliance. After all, the latter 2 arrangements will still make it easier for passengers to get from A to B.

 

[RSVKanga]

Im sure the CL subcomittee in Govt can negotiate the rest.

Why? Isn’t the 75% foreign carrier market share for AU-int’l market enough? The “rest” is only one airline. EK is restricted but they’re using less than half their slots given to them. QR is kept out for a long list of reasons.

Nothing preventing QF/JL and QF/MU resubmitting their ACCC application for a NON Joint Venture partnership.

Already exists.

Book flights directly on MU.

That defeats the entire purpose of what I’m trying to say. MU is a rival to QF now that the ACCC have shot down their JV on the SYD-PVG route. Booking flights directly on MU would harm QF even more.

 

[Albert Hoffman]

I have a counter proposal.
ACCC rips up the agreement with the national parasite and Alan Joyce and the board are thrown in jail for the rest of their lives.

 

[RooFlyer]

I knew you would bring this up.

You should have known that.

Both of which begs the question of why you stated things which weren’t true when you’re accusing others of doing the same .

Qantas and Emirates both flew to Dubai. Qantas and Emirates entered into a joint-venture. Qantas stopped flying to Dubai.

Can you expand again on this statement?

Every single JV proposal from QF has included more QF-metal flights to existing destinations and/or opening up of new QF-metal destinations.

Then

You do you.

I think I might take a leaf out of Paul Keatings playbook

 

[dajop]

Qantas and Emirates both flew to Dubai. Qantas and Emirates entered into a joint-venture. Qantas stopped flying to Dubai.

Not quite the right order.

Qantas didn't fly to Dubai. Qantas and Emirates entered into a joint venture. Qantas started flying to Dubai. As time went on Qantas went "hell no, the sandpit's not working for us, let's stop going via Dubai and reroute via PER and SIN instead."

But also relevant, Qantas and Emirates entered into a joint venture. Emirates stopped its' services from SYD, MEL and BNE to AKL.

 

[Himeno]

Emirates stopped its' services from SYD, MEL and BNE to AKL.

Even though maintaining capacity on the trans tasman routes was a condition of approving the JV.

 

[RooFlyer]

Not quite the right order.

Qantas didn't fly to Dubai. Qantas and Emirates entered into a joint venture. Qantas started flying to Dubai. As time went on Qantas went "hell no, the sandpit's not working for us, let's stop going via Dubai and reroute via PER and SIN instead."

But also relevant, Qantas and Emirates entered into a joint venture. Emirates stopped its' services from SYD, MEL and BNE to AKL.

Fair 'nuf, thanks. But the point & argument is the same.

 

[RSVKanga]

Both of which begs the question of why you stated things which weren’t true

But it was true?

Qantas and Emirates both flew to Dubai. Qantas and Emirates entered into a joint-venture. Qantas stopped flying to Dubai.

Can you expand again on this statement?

Are you saying that QF flew to Dubai before 2013 when the EK JV started? That's misinformation - they didn't.

QF have never flown to Dubai apart from that 2013-2018 period.

Qantas never flew to Dubai before they entered into the JV. The JV was the prompt for QF to start flying their own metal into DXB. The EK partnership was successful but the 'own metal' experiment wasn't received well by QF's customer base flying to LHR, so QF reverted to SIN. It's as simple as that. Unsure why you're trying to overcomplicate this.

What point are you even trying to make here?

 

[Quickstatus]

@evanb posted this in another thread

 

[#flying]

The ACCC doesn't have the power to 'veto international JVs'. It merely has the power to authorise conduct that would otherwise breach the competition laws if the benefits of the conduct outweigh the detriments.

Qantas would be free to enter into the agreement with China Eastern if the agreement did not potentially break the law (i.e. the same laws that every other company in the Australian economy is expected to comply with). The fact that the conduct is prima facie illegal speaks volumes in itself.

What you are really saying is that there should be special laws for Qantas to exempt it from laws preventing anti-competitive conduct, thereby allowing it to better compete with government owned carriers like SQ, EK, etc. That doesn't make sense for a number of reasons, including: (i) even if Qantas had a special legal status/wasn't subject to laws against anti-competitive conduct, it would have no chance competing against the likes of EK/QR/SQ given Australia's isolated location; and (ii) Australia also has a domestic aviation market to worry about, and exempting QF from competition laws would give it even greater market power in the domestic market - likely resulting in higher prices and worse service for consumers locally.

Your argument is a variation of the 'national champions' theory which was recently criticised by the head of the FTC in a speech which is summarised here.

 

[RSVKanga]

What you are really saying is that there should be special laws for Qantas to exempt it from laws preventing anti-competitive conduct

Yes. For its international operations.

Australia also has a domestic aviation market to worry about, and exempting QF from competition laws would give it even greater market power in the domestic market - likely resulting in higher prices and worse service for consumers locally.

The title of this thread is Is it time for the ACCC to lose its power to veto international JVs?

I'm not saying that the ACCC shouldn't have a role in the domestic aviation industry, and they play an integral part in the domestic economy as a whole. What I'm concerned about is that international aviation isn't a free for all and the ACCC has imposed increasingly unjust and unsubstantiated roadblocks on QF's international commercial interests, and makes a lot of foreign carriers as QF's enemies when they were/could've been strategic partners had ACCC not barged in. Why on earth would they block QF and MU collaborating for one route in the Aus-China market which has nine (9) airlines flying between the two countries? Ridiculous and counter-productive to our economy and our country.

​

 

[#flying]

Yes. For its international operations.



The title of this thread is Is it time for the ACCC to lose its power to veto international JVs?

I'm not saying that the ACCC shouldn't have a role in the domestic aviation industry, and they play an integral part in the domestic economy as a whole. What I'm concerned about is that international aviation isn't a free for all and the ACCC has imposed increasingly unjust and unsubstantiated roadblocks on QF's international commercial interests, and makes a lot of foreign carriers as QF's enemies when they were/could've been strategic partners had ACCC not barged in. Why on earth would they block QF and MU collaborating for one route in the Aus-China market which has nine (9) airlines flying between the two countries? Ridiculous and counter-productive to our economy and our country.

​

If you are genuinely interested, the reasons for the decision not to exempt Qantas from the competition laws are outlined here, although it should be noted that this is just a draft decision and the collaboration apparently didn't proceed because the parties appear to have withdrawn their application.

 

[Quickstatus]

the parties appear to have withdrawn their application.

Correct. The applicants are still able to submit a revised proposal if they feel strongly about the merits of their proposal

 

[evanb]

@evanb posted this in another thread

The link in the original thread has changed due to a migration of the website to a new platform. The new link is: Should the ACCC have rejected the Qantas-Emirates Joint Venture?

That being said, the thesis in the original article was that the ACCC decisions lack a solid analytical basis. In many respects, they ask the wrong questions and have a superficial understanding and knowledge of the industry including the costs structures, incentives, and strategic interactions. This is not a critique of the ACCC, but of their legal mandate!

The process is a legal evidentiary process. It's for the applicants and other interested parties to lead evidence, and for the ACCC to apply the law to that evidence. It's not for the ACCC to conduct the analysis! The weakness of the process has been recognised by the ACCC themselves and the recent reforms proposed by the Minister intends to shift the focus to a more analytic one. This should shift the process somewhat to allow the ACCC to conduct far more case specific analysis themselves. They won't have to rely on the applicants to present and analyse the data, which is currently the case! However, it isn't for for purpose to do this at the moment.

A key metric to how we might look at the effectiveness of the ACCC has been in their predictive claims in cases. For example, it never appeared a possibly to ACCC that rejecting the extension of the QF-MU JV would result on QF withdrawing entirely. In fact they argue the opposite.

In the VA-NZ codeshare, they don't recognise that not allowing codesharing on overlapping routes almost all incentives for VA to enter new trans-Tasman routes, thereby entrenching the status quo.

In the QF-NZ case, they predicted the possibility of EK withdrawing, but somehow only on one route, but they allowed them to withdraw from other routes anyway.

My argument was that they keep rejecting and/or approving the wrong ones! ACCC perform an incredibly important function, but the industry is complex and unique (most industries will argue the same), but the nature of the industry which means a much greater interactions between airlines and them requires far more industry specific expertise and skills (less lawyering and more analysis).

 

[RooFlyer]

Are you saying that QF flew to Dubai before 2013 when the EK JV started? That's misinformation - they didn't.

Yeah - you are a bit behind play. See posts before yours.

What point are you even trying to make here?

Never mind me. I'm just having a bit of fun with the ludicrous proposition that competition should be restricted so Qantas can increase its profit. Another great leg-pull

 

[justinbrett]

The QF/EK partnership is not a JV under the normal definition of a JV.

QF doesn’t get a cent of EK tickets on EK metal, likewise for EK on the reverse. It’s not all that different from the VA/QR deal.

This is very different to the previous QF/BA JV, or current QF/AA one.

 

[evanb]

The QF/EK partnership is not a JV under the normal definition of a JV.

QF doesn’t get a cent of EK tickets on EK metal, likewise for EK on the reverse. It’s not all that different from the VA/QR deal.

This is very different to the previous QF/BA JV, or current QF/AA one.

This is far from the case. It's correct that the QF-EK JV is not a revenue sharing JV like QF-AA is, but that is because QF and EK don't fly sufficient overlapping routes to warrant it. It's also the reason why many QF FF benefits don't accrue on EK tickets. However, that's somewhat besides the point.

The QF-EK JV is stratospherically different from the VA-QR codeshare. QF-EK coordinate scheduling, capacity and pricing, going as far as coordination of inventory and yield management. They can also combine various sales and operational functions, although it's not clear the extent to which this actually happens. VA-QR can't coordinate scheduling, capacity and pricing. In fact, QR maintain full pricing control and VA may recover the costs from QR, but VA have no say in pricing of itineraries involving QR, nevermind coordinating.