Qantas and China Eastern’s proposed five-year joint Australia, China services business which will see the airlines offer expanded services, improved departure and arrival schedules and shorter transit times, has been approved by the Australian Competition Consumer Commission (ACCC).
The ACCC says that over the next two years China Eastern is proposing to increase the frequencies of its services on routes between Shanghai (China) and the Australian destinations of Sydney, Melbourne and Cairns during peak periods and introduce year round services on a new route, “the details of which were provided to the ACCC confidentially”.
But, the conditions ACCC set for its approval for these new routes require Qantas and China Eastern to increase their combined capacity on routes between Shanghai and Australia over the five year term by 21.6 per cent. The ACCC says: “This broadly accords with the level of capacity growth proposed by Qantas and China Eastern, and their combined historical rates of growth.” The commission also says: “More broadly, the alliance will also allow the parties to co-ordinate the timing of connecting flights in both Australia and China, reducing total travel times.”
China Eastern chairman, Liu Shaoyong, says the airline looks forward to working with Qantas under the enhanced partnership and that: “We are very happy with the ACCC’s decision. Through this partnership we are helping to generate more tourism and trade opportunities with Australia and provide more convenient travel options for the many customers who travel between our two countries. We are excited by the possibilities ahead and look forward to helping our customers enjoy all that Australia and China have to offer.”
The joint business, announced in November 2014, was initially rejected by the ACCC in March. The commission has now approved the joint service for a five year period following the two airlines agreeing to the conditions that include the capacity increase. Qantas Group chief executive officer, Alan Joyce “By working with China Eastern we are able to maximise Qantas’ presence throughout China and build a more sustainable platform for future growth such as…new routes from Australia to Shanghai.”