Federal Transport Minister Anthony Albanese welcomed the ACCC decision, predicting regional areas would be among the big winners from the alliance.
Federal Transport Minister Anthony Albanese welcomed the ACCC decision, predicting regional areas would be among the big winners from the alliance. Jay Cronan

Final approval of airlines' alliance will make travel easier

PARTS of regional Australia can expect a boost in overseas tourists after the alliance between Qantas and Emirates was given the green light on Wednesday.

The Australian Competition and Consumer Commission's final approval has paved the way for the airlines to co-ordinate passenger and cargo transport operations and other related services.

Under the partnership Emirates can sell airfares to a number of regional destinations, including Coffs Harbour, Gold Coast, Bundaberg, Gladstone, Hervey Bay, Mackay and Rockhampton, for visitors from the United Kingdom, Europe, North Africa, South East Asia and the Middle East.

In all, Emirates has the ability to sell to 32 destinations around Australia, including eight in New South Wales and nine in Queensland.

Qantas International CEO Simon Hickey said the alliance would make travel within Australia easier for overseas visitors, with towns outside the capital cities to benefit.

"The partnership between Qantas and Emirates means that Emirates international customers are now able to purchase airfares on the biggest network of Australian destinations," Mr Hickey said.

"Tourism is a huge economic driver for Australia, creating jobs and promoting investment and development."

Mr Hickey said Qantas and Emirates would work closely with state-based tourism bodies to market the regional destinations.

Federal Transport Minister Anthony Albanese also welcomed the ACCC decision, predicting regional areas would be among the big winners from the alliance.

"Millions of travellers stand to benefit from cheaper fares, reduced travel times and greater access to more destinations in the Middle East, Africa and Europe," said Mr Albanese, who this week had regional development added to his portfolio.

"The partnership will also bring overseas tourists to more regional destinations in Australia and better access to international markets for regional Australians."

Qantas and Emirates will offer a total of 98 flights between Australia and Dubai, with Qantas continuing to operate daily services from Melbourne and Sydney through to London.

But the ACCC decision, which is valid for five years, came with a caveat.

The airlines will be required to maintain existing passenger capacity on four overlapping routes between Australia and New Zealand, which accounted for 65% of total passenger capacity between the countries in 2011/12.

"On these routes, the ACCC is concerned that Qantas and Emirates will have the ability and incentive to reduce or limit growth in capacity in order to raise airfares," ACCC chairman Rod Sims said.

Mr Sims said a review of these routes - Sydney-Auckland, Melbourne-Auckland, Brisbane-Auckland and Sydney-Christchurch - would be required to determine whether the minimum capacity needed increasing.

Qantas and Emirates began selling codeshare flights between Australia and a number of countries after the ACCC granted interim approval to the alliance some months ago.

The alliance would have "material, but not substantial" public benefits, Mr Sims said.

"The ACCC considers that the alliance is likely to result in public benefits through enhanced products and service offerings by the airlines, and improved operating efficiency," he said.

"In particular, the alliance is likely to provide Qantas and Emirates customers with increased access to a large number of existing frequencies and destinations under a single airline code, improved connectivity and scheduling, and access to each alliance partner's frequent flyer programs. The alliance is also likely to provide the airlines with increased flexibility to manage their fleet."

Under the arrangement Qantas and Emirates can co-ordinate their passenger and cargo transport operations and related services, including line maintenance engineering services and flight training for air crew and cabin crew, as well as joint procurement of goods and services, such as aviation fuel.

Qantas and Emirates did not seek authorisation for catering and aircraft cleaning services, which could have created competition concerns.