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

[MEL_Traveller]

There's this mind-blowing thing called summarising.

The ACCC's role, actions and intentions regarding QF's international commercial interests can quite clearly be summarised as counterproductive red tape. It prevents QF from having more partners, flying more passengers with additional frequencies and launching new QF routes/destinations, and hinders their profit.

And yes, Qantas profit is important (gasp!) to Australia and its economy, and it should be celebrated by all Australians.

But the ACCC isn’t there to only look after an airline’s interests. It’s there to look after consumers.

Consumer protection should come first. Provided the benefits are there for consumers, I’d expect the ACCC to approve arrangements.

But companies don’t help themselves. They try to out too much spin on things, which I think they assume public servants aren’t smart enough to pick up. That’s a major assumption.

We see it all the time with comments like ‘an australian equivalent of EU261 would be too confusing for passengers’, or ‘our alliance with xyz airline will remove confusion around fares’

Really? Do they really think people are confused when there are two or more airlines offer different fares? Do they think hundreds of millions of Europeans are confused about getting compensation of their flight is overbooked or cancelled?

 

[evanb]

You have no idea what you’re talking about. I recall it was you who posted an article on your own website as a source for a post you made on another topic. It’s obvious you see yourself as an authority but your words do not back that up.

Go and read the ACCC authorisation and show me where it says there’s a geographic restriction. It’s not there. In fact there’s a footnote saying the ACCC doesn’t feel the need to define the boundaries of the relevant markets. Yes the airlines have specified the markets as per the QF website but nowhere in the authorisation is that included. The conduct specifically states a global network for QF and EK passengers.

Functionally for pax the two arrangements are very similar for European routes. You can write a thesis on how it’s so different, but if VA and QR got the same authorisation that QF and EK have there’d be very few noticeable differences to the average pax.

This is hilarious. You seem to misunderstand the process entirely. Businesses are applying to ACCC for exemptions from the law. In order to be assessed, they have to outline the specific conduct in the application. The ACCC can only make a decision on what is asked of them.!

The application itself frames the geography! The "proposed conduct" that they applied for were connections between "Australia and New Zealand to Asia, the UK, Europe, and the Middle East and North Africa". See paragraph 1.2 of the application.

This ACCC decision states: "The ACCC has decided to revoke authorisation AA1000400 and grant authorisation AA1000625 in substitution to enable the Applicants to engage in the Conduct described in paragraph 1.14". Paragraph 1.14 further states "The Applicants seek re-authorisation for the following conduct under the terms of the Agreement and other associated agreements."

So what are the agreement? Well, it's the "Restated Coordination Agreement" which is the conduct that the ACCC approved. The proposal states that the "Restated Coordination Agreement" is for connections between "Australia and New Zealand to Asia, the UK, Europe, and the Middle East and North Africa". They approved the agreement in its entirely subject to the reporting conditions with respect to New Zealand. So no, the decision doesn't state the limitation, because the decision states they approved the conduct that was requested (that itself was geographically specific).

I guess you're referring to footnote 46? Are you trying to wilfully misrepresent it to get out of trouble? It doesn't mean what you say it means. It's a footnote to paragraph 4.4. Paragraph 4.4 outlines which geographic markets the ACCC's considered for their assessment, namely: "international air passenger services on routes between Australia and: New Zealand; countries in Asia including Singapore; the UK/Europe; international air cargo transport services between Australia and New Zealand,Australia and countries in Asia, and Australia and the UK/Europe; the Australian domestic air transport services market, in view of the significant Emirates feeder traffic to secondary Australian cities and regions." Again, they only assess based on the scope relevent to the specific conduct.

The footnote states "However, the ACCC does not consider it necessary to precisely define the boundaries of relevant market/s". This is simply not referring to the geographic scope of the application, but to the geographic boundaries of (say) Asia or Europe.

The agreements may be functionally similar for passengers in some respects but not others. For example, the EK-QF agreement would be quite different to QR-VA in IROPS situations. But that is not at all what the broader discussion was about. The thread is about the ACCC and their affect on competition and markets in the airline industry. Many don't think they are doing a great job at the moment, and the EK-QF was a discussed example of this. Yes, I write a blog focusing on analysis, mostly data driven. I've linked that as a resource and source to support discussion. Relevent to this was the data regarding the EK-QF decision which provided analysis support for my opinion that it shouldn't have been approved due to the trans-Tasman capacity. At the time you argued that they could have carved that out, but it can't (single market). But I guess that's besides the point. Sourcing things are important when one is claiming factual statements. By blog isn't the source, rather my blog is the analysis of actual data.

 

[justinbrett]

This is hilarious. You seem to misunderstand the process entirely. Businesses are applying to ACCC for exemptions from the law. In order to be assessed, they have to outline the specific conduct in the application. The ACCC can only make a decision on what is asked of them.!

The application itself frames the geography! The "proposed conduct" that they applied for were connections between "Australia and New Zealand to Asia, the UK, Europe, and the Middle East and North Africa". See paragraph 1.2 of the application.

This ACCC decision states: "The ACCC has decided to revoke authorisation AA1000400 and grant authorisation AA1000625 in substitution to enable the Applicants to engage in the Conduct described in paragraph 1.14". Paragraph 1.14 further states "The Applicants seek re-authorisation for the following conduct under the terms of the Agreement and other associated agreements."

So what are the agreement? Well, it's the "Restated Coordination Agreement" which is the conduct that the ACCC approved. The proposal states that the "Restated Coordination Agreement" is for connections between "Australia and New Zealand to Asia, the UK, Europe, and the Middle East and North Africa". They approved the agreement in its entirely subject to the reporting conditions with respect to New Zealand. So no, the decision doesn't state the limitation, because the decision states they approved the conduct that was requested (that itself was geographically specific).

I guess you're referring to footnote 46? Are you trying to wilfully misrepresent it to get out of trouble? It doesn't mean what you say it means. It's a footnote to paragraph 4.4. Paragraph 4.4 outlines which geographic markets the ACCC's considered for their assessment, namely: "international air passenger services on routes between Australia and: New Zealand; countries in Asia including Singapore; the UK/Europe; international air cargo transport services between Australia and New Zealand,Australia and countries in Asia, and Australia and the UK/Europe; the Australian domestic air transport services market, in view of the significant Emirates feeder traffic to secondary Australian cities and regions." Again, they only assess based on the scope relevent to the specific conduct.

The footnote states "However, the ACCC does not consider it necessary to precisely define the boundaries of relevant market/s". This is simply not referring to the geographic scope of the application, but to the geographic boundaries of (say) Asia or Europe.

The agreements may be functionally similar for passengers in some respects but not others. For example, the EK-QF agreement would be quite different to QR-VA in IROPS situations. But that is not at all what the broader discussion was about. The thread is about the ACCC and their affect on competition and markets in the airline industry. Many don't think they are doing a great job at the moment, and the EK-QF was a discussed example of this. Yes, I write a blog focusing on analysis, mostly data driven. I've linked that as a resource and source to support discussion. Relevent to this was the data regarding the EK-QF decision which provided analysis support for my opinion that it shouldn't have been approved due to the trans-Tasman capacity. At the time you argued that they could have carved that out, but it can't (single market). But I guess that's besides the point. Sourcing things are important when one is claiming factual statements. By blog isn't the source, rather my blog is the analysis of actual data.

What is hilarious is you've completely changed your POV from your response to me when I first brought this up in the other thread. Are you a single person or are you using a shared account with someone who has different opinions to you?

If you actually read the authorisation and application rather than just searching for keywords, it specifically says both what the the proposed (and later authorised) conduct covers. In fact, the application even includes a table of lounges that could be accessed by the other party, which includes EK lounges at JFK and SFO. Paragraph 5.7 of the application specifically says they seek to implement the proposed conduct globally, including markets where the carriers indirectly overlap.

You seem hell bent on using insults to debate rather than debate civilly so I'm done with you.

 

[evanb]

What is hilarious is you've completely changed your POV from your response to me when I first brought this up in the other thread. Are you a single person or are you using a shared account with someone who has different opinions to you?

If you actually read the authorisation and application rather than just searching for keywords, it specifically says both what the the proposed (and later authorised) conduct covers. In fact, the application even includes a table of lounges that could be accessed by the other party, which includes EK lounges at JFK and SFO. Paragraph 5.7 of the application specifically says they seek to implement the proposed conduct globally, including markets where the carriers indirectly overlap.

You seem hell bent on using insults to debate rather than debate civilly so I'm done with you.

Your attempt to twist things around are so bad that they're comical. Yes, the restrictions of not including the Americas and South Africa are self-imposed since they did not include it in their application!!! Since they didn't include it, the ACCC couldn't consider it.

The secondary part was purely speculative and I prefaced it by saying "I suspect". This speculation was to why I thought they didn't include South Africa and India.

I also indicated that the self-imposed might not always be a good term for not including a country/region since they are also affected by exogenous events, i.e. that India isn't included because they can't (e.g. India where the Indian bilateral imposed the limits).

No idea how I have completely changed by POV since I haven't changed it at all. I didn't disagree that they aren't mentioned in the authorisation since they this is factually correct, however your subsequent interpretation here is not. It's not mentioned at all because it wasn't applied for. But your twisting has created another problem. You say here that it's mentioned by default in the footnote (which you clearly misrepresent), but you said previously that it wasn't "mentioned at all". Both can't be true. Also that this "could be removed at any time if QF & EK wish". Again, I didn't challenge this since it's factually correct. They could remove it by seeking an adjustment from the ACCC at any time!

 

[evanb]

If you actually read the authorisation and application rather than just searching for keywords, it specifically says both what the the proposed (and later authorised) conduct covers. In fact, the application even includes a table of lounges that could be accessed by the other party, which includes EK lounges at JFK and SFO. Paragraph 5.7 of the application specifically says they seek to implement the proposed conduct globally, including markets where the carriers indirectly overlap.

You seem hell bent on using insults to debate rather than debate civilly so I'm done with you.

As to what's up with the civility? Well, you have this knack of misquoting and quoting out of context. When this is raised, you ignore it and move on to another track. You're a smart guy, so one can only assume that it's somewhat international, either to misrepresent, or to ignore. You want to drop a bomb and then ignore it when you're caught. Either way, that's an incredibly uncivil way to debate. So please forgive my lack of civility.

This is another example of this. You remove the context entirely. The proposed conduct "globally" refers to an earlier specific reference which was not about specific geographies, but the partnership elements that cannot really be excluded. Part 5.4 to 5.7 is then specifically about the overlapping routes, and 5.7 that these global approvals shouldn't be limited by indirect overlap (whatever that means). Part 5.7 isn't arguing that that they can share capacity globally. Fundamentally that is outside the ACCC's. For example, ACCC have no say if Qantas and Emirates can coordinate on say flights between Europe and the US. Your incredibly broad interpretation would suggest they can. It's an absurd interpretation.

And yes, all these applications like to show off the customer benefits like lounges. They're not the conduct that they're seeking approval for. However, it's the evidence that the airlines like to show to bolster the case that it has benefits. Are you really trying to suggest that the ACCC is regulating which lounges they can and can't use in a third country? You've literally expanded the scope of the ACCC's regulatory powers in an extraordinary extra judicial expansion.

Anyway, time for some actual work. We have a ton of work to do for major cases in Europe. I'm going to see if I can convince the lawyer to use your extra judicial expansion argument to argue that the European Commission should be able to allow clients to run JVs globally. It really would be groundbreaking!

 

[RSVKanga]

The airline’s head of international flights Cam Wallace said the decision to withdraw flights from mainland China less than a year after relaunching them was due to aircraft capacity restraints and Qantas’ failure to get approval to coordinate with China Eastern.

“We’re going to have to make decisions quicker and be more agile with deploying aircraft into more productive cities, especially as we move towards fleet reinvestment,” Wallace said. Link

Qantas have now confirmed that the ACCC is responsible for the withdrawal of their Sydney-Shanghai service because the so called “watchdog” forced a foreign airline that was a key QF partner to become enemies with QF. The ACCC have now gifted MU a monopoly on that route.

Spoiler: Further Stuff

When will Gina Cass-Gottlieb and her despicable, faceless ACCC colleagues hang their heads in shame?

They should back off from interfering in an Australian company’s commercial interests in an international market that is incredibly volatile and competitive, and stick to everyday issues affecting all of us, like the supermarkets.

If they don’t back off, then I’d support any proposal for reform that puts the watchdog back into the cage where it belongs.

 

[RooFlyer]

Qantas have now confirmed that the ACCC is responsible for the withdrawal of their Sydney-Shanghai service because the so called “watchdog” forced a foreign airline that was a key QF partner to become enemies with QF.

Gosh, is that what Qantas really said? And anyway, you believe them?

 

[jase05]

T

Gosh, is that what Qantas really said? And anyway, you believe them?

This is what they really said
From the SMH

Cam Wallace, the airline’s head of international flights, said the decision to withdraw flights from mainland China less than a year after relaunching them was due to aircraft capacity restraints and Qantas’ failure to get approval to coordinate with China Eastern.

“We’re going to have to make decisions quicker and be more agile with deploying aircraft into more productive cities, especially as we move towards fleet reinvestment,” Wallace said.

“Getting out of China was the right call. We still serve China through Hong Kong, and we still have a code share relationship with China Eastern,” he added.

 

[Quickstatus]

Qantas have now confirmed that the ACCC is responsible for the withdrawal of their Sydney-Shanghai service because the so called “watchdog” forced a foreign airline that was a key QF partner to become enemies with QF

If you read carefully it says 'Qantas' failure to get approval'. Who failed?
QF can still put its passengers on a codeshare on MU, and if its a freesale codeshare, there is no inventory risk. I don't see an issue.

 

[elanshin]

I feel like saying ACCC failed QF for PVG <> SYD is complete utter BS and just corporate talk. You can claim anything but ultimately QF does NOT have an appealing product for the Chinese market and there has been a mass exodus of expats and business travel from China that previously QF would have served.

I as a passenger, should not be helping QF out as a translator because they failed to put 1 fluent mandarin speaker on my flight. They had 1 girl who had flaky mandarin at best.

Couple that with not really understanding the Chinese market with food options, amenities and pricing, its not a stretch why the back of the plane was very empty but MU's double daily to Sydney have pretty decent loads.

 

[justinbrett]

I feel like saying ACCC failed QF for PVG <> SYD is complete utter BS and just corporate talk. You can claim anything but ultimately QF does NOT have an appealing product for the Chinese market and there has been a mass exodus of expats and business travel from China that previously QF would have served.

I as a passenger, should not be helping QF out as a translator because they failed to put 1 fluent mandarin speaker on my flight. They had 1 girl who had flaky mandarin at best.

Couple that with not really understanding the Chinese market with food options, amenities and pricing, its not a stretch why the back of the plane was very empty but MU's double daily to Sydney have pretty decent loads.

That's pretty normal though, even if you look at BA/QF or AA/QF which are all English speaking and have almost identical cultures and food offerings; yet each of the carriers will almost always have a big sway to its home populations.

QF made a lot of threats before the AA JV was approved, and when it was blocked by US DoT in 2016 it did follow through on many of them (including the terrible SC earn rate on AA). That all went away after it was approved. There's some merit to this strategy if the airline is prepared to follow through.

 

[TheRealTMA]

T

This is what they really said
From the SMH

Cam Wallace, the airline’s head of international flights, said the decision to withdraw flights from mainland China less than a year after relaunching them was due to aircraft capacity restraints and Qantas’ failure to get approval to coordinate with China Eastern.

“We’re going to have to make decisions quicker and be more agile with deploying aircraft into more productive cities, especially as we move towards fleet reinvestment,” Wallace said.

“Getting out of China was the right call. We still serve China through Hong Kong, and we still have a code share relationship with China Eastern,” he added.

Gosh. That's quite a bit different from the OP's rant? So this seems to suggest it was all QF's fault and nothing to do with ACCC.

 

[UP4014]

Gosh, is that what Qantas really said? And anyway, you believe them?

T

This is what they really said
From the SMH

Cam Wallace, the airline’s head of international flights, said the decision to withdraw flights from mainland China less than a year after relaunching them was due to aircraft capacity restraints and Qantas’ failure to get approval to coordinate with China Eastern.

“We’re going to have to make decisions quicker and be more agile with deploying aircraft into more productive cities, especially as we move towards fleet reinvestment,” Wallace said.

“Getting out of China was the right call. We still serve China through Hong Kong, and we still have a code share relationship with China Eastern,” he added.

Extract from the QF site itself.

Suspension of Sydney-Shanghai flights

From 28 July 2024, flights to Shanghai will be suspended due to low demand.

Qantas resumed its Sydney-Shanghai service in October last year after it was paused during COVID, however demand has not recovered as anticipated.

Qantas will continue to monitor the Australia-China market closely and will look to return to Shanghai when demand has recovered.

 

[Forg]

Maybe QF should remove some bolts at random & hire some kids straight outta high school to fly the ‘planes, to compete with the CCP airlines into CCP Land?

 

[RooFlyer]

Ah, so it was not enough planes and an uncompetitive product that drove QF out of Shanghai. Pity.

I as a passenger, should not be helping QF out as a translator because they failed to put 1 fluent mandarin speaker on my flight. They had 1 girl who had flaky mandarin at best.

You must be kidding, but I'm sure you aren't.

 

[RSVKanga]

uncompetitive product that drove QF out of Shanghai. Pity.

Really? How is QF J even on par with MU let alone worse. These are the seats the airlines offer on the SYD-PVG route:






How on earth is MU’s product better? Note that the photo doesn’t include the bulky monitor IFE from the late 1990s/early 2000s era.

 

[elanshin]

Really? How is QF J even on par with MU let alone worse. These are the seats the airlines offer on the SYD-PVG route:

View attachment 389006

View attachment 389008


How on earth is MU’s product better? Note that the photo doesn’t include the bulky monitor IFE from the late 1990s/early 2000s era.

You clearly have no idea if you pulled their dated a330 for comparison which they dont fly to Sydney. They've been flying the a350-900 shortly after they got them to Sydney and has been that frame since.
Perhaps you're thinking of BNE-PVG? Even MEL -PVG runs their new 787s (under FM often).

The a359 use an updated version of the Thomson Vantage XL seat (you know the same one that QF uses) except there's a privacy screen. Oh there's also premium economy onboard. QF would need to fly their 787s to even match the hard product.

But at the end of the day, they are catering for the Chinese market which QF utterly failing at. I wouldn't recommend MU to western flyers that aren't used to Chinese culture and personally I prefer QF myself. But right now thats not where there's demand to and from China. It's mainly the Chinese flying .

 

[Forg]

Price is king, king king king. Down to the dollar.

 

[Quickstatus]

QF should just do smaller aircraft on such routes
Maybe the A321XLR

 

[jase05]

QF should just do smaller aircraft on such routes
Maybe the A321XLR

With the prices Chinese carriers are charging currently is it even worth QF’s time?
Some of the flights I’ve looked at from Australia to China are $1100-1400 one way in J. Now admittedly there is a few of them I’m not keen on and no hurry to fly with again but a couple of them I rate highly