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The Australian Consumer watchdog issued a draft determination today that will block the agreement between Qantas, and its subsidiary Jetstar, and China Eastern Airlines that enabled the two airlines to coordinate operations between Australia and China.
The ACCC believes that the agreement breaches Australian competition laws.
ACCC commissioner Anna Brakey said ‘China Eastern is the only airline flying direct between Sydney and Shanghai. We are not satisfied that the likely harm to competition from Qantas and China Eastern’s proposed coordination would be outweighed by any potential benefits’.
‘We are concerned that the authorisation would provide Qantas and China Eastern with the opportunity and incentive to increase prices’ Also would limit or delay the introduction of additional capacity (from other airlines) on the Sydney-Shanghai route as passenger demand continues to grow as Chinese tour groups return to the country’.