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

[RSVKanga]

Over the past five years, Qantas has lost the opportunity/ability to collaborate deeper with Cathay Pacific (ACCC rejected in 2019), Japan Airlines (ACCC rejected in 2021) and China Eastern (ACCC rejected in 2023) due to the actions of the ACCC. They have also expressed their concerns at the current QF-AA and QF-EK agreements.

While the ACCC's role is integral in Australia's domestic economy for all industries, international aviation isn't a free market and QF should not have its own country preventing it from collaborating with partner airlines that would see more routes and destinations served on QF metal. No other developed country has a "competition watchdog" consistently scrutinising their national carrier's commercial interests internationally; rather it's the government's transportation department that gives the rubber stamp.

For some airlines, successful codeshares/JVs will disincentivise airlines from flying some routes on their own metal. It applies very much to Virgin Australia (who are unlikely to operate flights to AKL, WLG and CHC if the NZ codeshare is approved) but certainly not to our national carrier. It's quite the opposite really. QF had big plans for a Cairns-Tokyo 787 route for example which was shot down by the ACCC when it rejected closer partnership with JAL in 2021. In a more recent example, the ACCC is also partly to blame for QF's Shanghai service being shut as it was a very successful service pre-Covid when they had the MU JV and the ACCC shot it down in late 2023. With MU being unable to fill QF A330s by selling MU tickets for QF metal flights, how can QF's PVG service be successful?

Tell me, is there a Singapore Competition Watchdog that regulates aviation? Is there one in Qatar? UAE? It's partly why those airlines from those countries are successful.

The system is broken. It's out of date and the ACCC forces so many strategic friends and potential friends of QF to become enemies which impact QF more than the other airline.

IMO QF's future JV applications should be rubber-stamped by the Department of Transport rather than the ACCC - so the national interest (supporting Australian businesses) can be considered in addition to 'competition'. It's what the USA does and it'll work well in Australia.

 

[RooFlyer]

Of course, the more sinister aspect is why there is only ONE Australian Competition and Consumer Commission.

How about a bit of competition yourself, Ms Cass-Gottlieb? The role of competition watchdogs should be itself opened up to competition and they should then have to bid for the final ruling on anti-competitive behaviour, helping Qantas to keep down competition and their prices high.

 

[muppet]

I have the opposite view, the ACCC has been permitting too much concentration of market power across all industries not just aviation. It’s partially why we pay so much more than in other countries.

JVs have their place, but its crazy to permit a JV between the only two carriers serving a market.

The new ACCC leadership seems to have a better outlook than the past two decades.

 

[MEL_Traveller]

I have the opposite view, the ACCC has been permitting too much concentration of market power across all industries not just aviation. It’s partially why we pay so much more than in other countries.

JVs have their place, but its crazy to permit a JV between the only two carriers serving a market.

The new ACCC leadership seems to have a better outlook than the past two decades.

Agree!

Anytime airlines promote a JV or other arrangements as being ‘to the benefit of passengers by removing confusion around fares’ you know it’s not a good thing

 

[Quickstatus]

rubber-stamped by the Department of Transport

With a commensurate addition to the CL membership?
Get the CL Subcommittee of the Dept of Transport to allow QR, UA, NH, ANA, EK, SQ, NZ and others unlimited international traffic rights first - then we talk...

QF should not have its own country preventing it from collaborating with partner airlines

In that case, the government should first repeal the Qantas Sale Act 1992 and open it up to unlimited foreign shareholding, remove requirement for Australian citizenship in the C Suite, and requirement for head office to be in Australia.

 

[tdimdad]

If you want to compare the aviation markets, then instead of Singapore + Kuwait + UAE, perhaps more comparable markets would be e.g. the UK and Japan, which both have domestic markets and regional & long-haul international markets. What do the competition / approval authorities do there? How about JV's by dominant carriers there?

JV's can also be a way to limit competition. The grey area between JV and collusion can be murky. From this viewpoint, it can sometimes be a good thing to prevent the said JV's. This also comes close to the debate about allowing QR more flights to Australia: limit vs allow competition between operators. The question of who exactly should run the ruler over the proposed deals or services is secondary one, as long as it's fair and equitable to all operators.

 

[Himeno]

With a commensurate addition to the CL membership?
Get the CL Subcommittee of the Dept of Transport to allow QR, UA, NH, ANA, EK, SQ, NZ and others unlimited international traffic rights first - then we talk...

4 of those 6 listed airlines do have unlimited traffic rights with Australia. That's what the open skies agreements are for.

 

[Himeno]

JVs have their place, but its crazy to permit a JV between the only two carriers serving a market.

I could understand the QF/JL JV being blocked 10 years ago when it was just those airlines on the non stop AU-JP route. Not anymore, and not when they applied for the JV.

There are now 4.5 airlines on the non stop route (every international carrier from both ends), in addition to a dozen or so (reasonable) 1 stop options.

 

[downgraded]

Over the past five years, Qantas has lost the opportunity/ability to collaborate deeper with Cathay Pacific (ACCC rejected in 2019), Japan Airlines (ACCC rejected in 2021) and China Eastern (ACCC rejected in 2023) due to the actions of the ACCC. They have also expressed their concerns at the current QF-AA and QF-EK agreements.

While the ACCC's role is integral in Australia's domestic economy for all industries, international aviation isn't a free market and QF should not have its own country preventing it from collaborating with partner airlines that would see more routes and destinations served on QF metal. No other developed country has a "competition watchdog" consistently scrutinising their national carrier's commercial interests internationally; rather it's the government's transportation department that gives the rubber stamp.

For some airlines, successful codeshares/JVs will disincentivise airlines from flying some routes on their own metal. It applies very much to Virgin Australia (who are unlikely to operate flights to AKL, WLG and CHC if the NZ codeshare is approved) but certainly not to our national carrier. It's quite the opposite really. QF had big plans for a Cairns-Tokyo 787 route for example which was shot down by the ACCC when it rejected closer partnership with JAL in 2021. In a more recent example, the ACCC is also partly to blame for QF's Shanghai service being shut as it was a very successful service pre-Covid when they had the MU JV and the ACCC shot it down in late 2023. With MU being unable to fill QF A330s by selling MU tickets for QF metal flights, how can QF's PVG service be successful?

Tell me, is there a Singapore Competition Watchdog that regulates aviation? Is there one in Qatar? UAE? It's partly why those airlines from those countries are successful.

The system is broken. It's out of date and the ACCC forces so many strategic friends and potential friends of QF to become enemies which impact QF more than the other airline.

IMO QF's future JV applications should be rubber-stamped by the Department of Transport rather than the ACCC - so the national interest (supporting Australian businesses) can be considered in addition to 'competition'. It's what the USA does and it'll work well in Australia.

Isn't the primary purpose of JVs for QF so that it can put its flight numbers on other carrier's planes, thus avoiding growing it's business, employing Australians or doing anything for the national interest. Where it does retain a route it has reduced competition for a more limited resource and can hike the price.

 

[Himeno]

Isn't the primary purpose of JVs for QF so that it can put its flight numbers on other carrier's planes, thus avoiding growing it's business, employing Australians or doing anything for the national interest. Where it does retain a route it has reduced competition for a more limited resource and can hike the price.

Every actual JV proposal Qantas has made has come with promises of new QF operated routes in the market in question.

The QF/CX agreement in 2019 was just to increase codesharing on the AU-HKG route which IASC knocked back.

 

[drron]

Funny I wondered why the ACCC renewed the EK QF joint venture last year when the only direct flights between Australia and Dubai are with EK, after QF stopped it's services there.

 

[Himeno]

Funny I wondered why the ACCC renewed the EK QF joint venture last year when the only direct flights between Australia and Dubai are with EK, after QF stopped it's services there.

Because of the VA agreements with EKs local competition.

 

[drron]

Because of the VA agreements with EKs local competition.

Seems a bit stupid on QF's part. Especially as QR now has the world's biggest JV and probably get larger with Finnair. Plus they have said they are working on AA and JL to expand their limited JVs. Also have a JV with Royal Maroc and working on Qman air.

 

[oz_mark]

Singapore has the CCCS which investigates SQs agreements with various other airlines.

 

[Himeno]

Seems a bit stupid on QF's part. Especially as QR now has the world's biggest JV and probably get larger with Finnair. Plus they have said they are working on AA and JL to expand their limited JVs. Also have a JV with Royal Maroc and working on Qman air.

QF partnering with EK over QR made sense when it first started, but after QF pulled out of DXB to resume EU flights via SIN and non stops from PER, it didn't make sense to keep it after 2018.

With QR already being a oneworld member (having joined a few months after the QF/EK partnership started) and their network having grown to almost match EKs by the time the QF/EK agreement was up for renewal in 2018, QF should have stepped away from EK and created a partnership with QR prior to 2020.

 

[Forg]

"The ACCC is toothless, the ACCC doesn't do ANYTHING about supermarket duopolies and how they price-gouge both the customer and the supplier!"

"The ACCC is too harsh, they won't allow Qantas to monopolise routes, how cruel!"

 

[odysseus]

Tell me, is there a Singapore Competition Watchdog that regulates aviation? Is there one in Qatar? UAE? It's partly why those airlines from those countries are successful.

All of those are countries with single state carriers owned by the government.

Why would their governments put any regulatory controls that could limit their carrier's operations, thus damaging their own business interests?

This is different from Australia where Qantas is a publicly listed entity, and Virgin is also a national carrier.

 

[RooFlyer]

Funny I wondered why the ACCC renewed the EK QF joint venture last year when the only direct flights between Australia and Dubai are with EK, after QF stopped it's services there.

Because of the VA agreements with EKs local competition.

You mean VA-QR? That came after the QF-EK agreement was renewed - in fact the renewal was the reason for QR going with VA.

Either way, did Australian consumers benefit from the re-approval of a JV on a route where there was no competition?

 

[RSVKanga]

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.

With a commensurate addition to the CL membership?
Get the CL Subcommittee of the Dept of Transport to allow QR, UA, NH, ANA, EK, SQ, NZ and others unlimited international traffic rights first - then we talk...

Five out of those seven airlines you listed indeed have unlimited traffic rights into Australia! You should know this. You can Google it yourself.

JVs have their place, but its crazy to permit a JV between the only two carriers serving a market.

Come on, there are four different carriers that fly between Australia and Japan and yet the ACCC rejected the QF-JL JV.

To make the ACCC's myopia and possible agenda even more apparent, there is a whopping nine different carriers flying between Australia and China, yet the ACCC rejected the QF-MU JV and now QF is withdrawing from PVG as MU can't sell tickets for those QF flights which was what enabled the service to be successful before.

Isn't the primary purpose of JVs for QF so that it can put its flight numbers on other carrier's planes, thus avoiding growing it's business, employing Australians or doing anything for the national interest. Where it does retain a route it has reduced competition for a more limited resource and can hike the price.

No. For airlines like VA, your comment is totally correct. But for QF, it's the opposite. Every single JV proposal from QF has included more QF-metal flights to existing destinations and/or opening up of new QF-metal destinations. Cairns-Tokyo QF 787 killed by ACCC after JAL JV decision. Sydney-Shanghai A330 killed by ACCC after MU JV decision.

 

[BAM1748]

International JVs would reduce the number of airlines flying here. Daft.