The ACCC proposes to deny coordination between Qantas and China Eastern

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oz_mark

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The ACCC has issued a draft determination proposing to deny authorisation for Qantas Airways Ltd and China Eastern Airlines Corporation Limited and their related entities (including Jetstar) to continue coordinating operations between Australia and mainland China.
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www.accc.gov.au

The ACCC proposes to deny coordination between Qantas and China Eastern

The ACCC has issued a draft determination proposing to deny authorisation for Qantas Airways Ltd and China Eastern Airlines Corporation Limited and their related entities (including Jetstar) to continue coordinating operations between Australia and mainland China. Qantas and China Eastern are...
www.accc.gov.au www.accc.gov.au
 
Not sure if there's any real practical differences to pricing whether MU and QF are aligned or not.

Chinese flyers would typically prefer MU and western QF. MU is already relatively cheap and if anything they want to target people here to fly to EU for cheaper. Very much competing against QF with price since people don't like transiting through china.

Even QF isn't that expensive flying to Shanghai offpeak. Brother picked up return for 900ish to Shanghai in economy.
 
But MU has already announced it will be resuming BNE next month:

Chinese carriers returning to Queensland

Chinese Eastern is the most recent announcement, "proudly funded" by the Queensland Government's Attracting Aviation Investment Fund. MU will be daily over the local Summer Season, and 3x weekly at other times https://newsroom.bne.com.au/china-eastern-to-fly-to-brisbane-from-next-month/
www.australianfrequentflyer.com.au www.australianfrequentflyer.com.au
 
elanshin said:
MU is already relatively cheap and if anything they want to target people here to fly to EU for cheaper. Very much competing against QF with price since people don't like transiting through china.
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But wouldn’t that be a contributing reason why the ACCC would want to block the arrangement? If they are competing flat out, then why would they want to cooperate? Potential to ‘align’ timetables and pricing?
 
RooFlyer said:
But wouldn’t that be a contributing reason why the ACCC would want to block the arrangement? If they are competing flat out, then why would they want to cooperate? Potential to ‘align’ timetables and pricing?
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Connection to the rest of the network in Australia from QF and vice versa for China I'd imagine. Although MU would have the 3 eastern cities covered soon.

Also probably usage of QF facilities like lounges in Australia (and vice versa in China for QF flyers).

I'd argue that the MU market and the Qf Market are different to begin with so they're basically like 2 monopolies on the direct route complimenting each other. MU's competition comes from the other Chinese Carriers, QF is mainly just doing their own thing.

That said blocking this might make QF partner with CZ for China.
 
[Referring to post five, which was moved from another thread that was titled ‘Another Qantas pile on?’

That actually doesn't read like a Qantas pile on. Critical of the ACCC?
But to address what they say, i don't think the ACCC needs to take account of China's airline policies - just the state of competition for Australia's consumers.
 
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RooFlyer said:
That actually doesn't read like a Qantas pile on. Critical of the ACCC?
But to address what they say, i don't think the ACCC needs to take account of China's airline policies - just the state of competition for Australia's consumers.
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If there are policies in place regarding operations to mainland China, you would hope the ACCC are across these before going after QF.
 
Is that limited to them codesharing on each other's service SYD-PVG and MEL-PVG, or also on domestic connections in China on MU out of PVG?
 
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It is only an Interim determination at this point.
www.accc.gov.au

The ACCC proposes to deny coordination between Qantas and China Eastern

The ACCC has issued a draft determination proposing to deny authorisation for Qantas Airways Ltd and China Eastern Airlines Corporation Limited and their related entities (including Jetstar) to continue coordinating operations between Australia and mainland China. Qantas and China Eastern are...
www.accc.gov.au www.accc.gov.au

Though there was in 2018 a decision by the Chinese authorities to pare back the one airline one route policy especially with countries with an open skies agreement.
onemileatatime.com

China Scaling Back Their “One Route, One Airline” Rule

For years China has had a regulation where only one Chinese airline can operate each longhaul route. The country is scaling back that policy as of October 1, 2018. Here's what this means for consumers.
onemileatatime.com onemileatatime.com

No idea though if that has survived Covid. If it hasn't it would be stupid for QF to not chase an agreement as they probably would have to survive the Chinese having low fares as the Chinese are want to do until they have a monopoly.

Anyway no way this is a QF pile on. More like evidence as to why the ACCC loses a few court cases.
 
I suspect QF will withdraw from the Chinese market if they can't codeshare.

The vast majority of travellers on that route are Chinese and the vast majority of them book with Chinese carriers. Couple that with the fact Chinese tourist numbers are only at about 10% of pre covid numbers - it's not viable for QF to go alone.
 
justinbrett said:
I suspect QF will withdraw from the Chinese market if they can't codeshare.

The vast majority of travellers on that route are Chinese and the vast majority of them book with Chinese carriers. Couple that with the fact Chinese tourist numbers are only at about 10% of pre covid numbers - it's not viable for QF to go alone.
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Yeah - I am not sure how much of QFi metal capacity is currently directed towards mainland China now vs pre-Covid QFi? Not a lot I would imagine pre-Covid, and even less post-Covid?

Your assessment that if QF cannot codeshare with MU there seems to be no point QFi serving mainland China sounds about right. Its a low-yield bloodbath with numerous mainland Chinese competitors who have almost infinite resources and capacity in the market, why would you want to compete with that? Its nothing that QF is good at, or competitive in, and I don't know why they would want to be in that market. So having said all that it does seem a bit naive, parochial, and myopic that the ACCC would want QF to compete with mainland Chinese carriers rather than cooperate with them.

Unless something changes and China becomes less of a PITA to transit through, the Chinese carriers are only going to attract the lowest of yields for passengers who may want to use Chinese carriers as a transit in some sort of long-haul itinerary.
 
odysseus said:
It's quite possible for Qantas to compete against China Eastern on that route.
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Especially considering the fact that the routing China Eastern uses to get to China is far from ideal. As its name suggests they must fly in an Easterly direction to get to China meaning a circumnavigation of the globe is in order!
 

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