Qantas and China Eastern have gained the approval by Australian authorities to continue a current partnership involving the coordination of flights between mainland China and Australia through 2023.
The approval was granted by the Australian Competition and Consumer Commission (ACCC) which will allow the joint coordination agreement (JCA) between the two airlines to continue through March 31, 2023.
The JCA between both airlines was originally filed in 2015, and the airlines previously sought to extend the agreement by 18 months to March 2022. However, the COVID-19 pandemic was a main reason for the ACCC's decision to increase the duration of the partnership.
In its findings, the ACCC said "in times of more normal levels of demand for services between Sydney and Shanghai, as was the case prior to the COVID-19 pandemic, and likely will be again in the medium to long term, the lessening in competition between the Applicants on the Sydney – Shanghai route as a result of the Proposed Conduct is likely to result in a significant public detriment."
Prior to the pandemic and mass flight reductions, Qantas and China Eastern were banned from coordinating on flights between Sydney and Shanghai – China Eastern's main hub - which accounted for around 23% of travel between China and Australia.
The ACCC's final decision will allow the two airlines to reinstate flights and boost capacity as international travel restrictions ease. The ACCC added: “The ACCC also considers that as travel between Australia and China resumes, the extended Joint Coordination Agreement is likely to result in public benefits by assisting the applicants to provide an expanded range of destinations on a single ticket, improve connectivity, provide shorter journey times, and provide a wider range of loyalty program benefits,”
While Qantas and China Eastern has secured their partnership through 2023, the Australian-based Qantas is seeking a joint venture with its Japan-based OneWorld partner airline Japan Airlines that if approved would start in the second half of 2021.