Australia competition watchdog may deny Qantas, China Eastern agreement

[SYDNEY] Australia's competition watchdog on Tuesday proposed to deny its approval for a plan between Qantas Airways and China Eastern Airlines to co-ordinate operations between the two countries.

Australian Competition & Consumer Commission said the carriers' proposed joint co-ordination agreement could result in"significant public detriment" by giving them increased ability and incentive to limit capacity or increase airfares on the Sydney-Shanghai route.

Qantas and China Eastern together account for more than 80 per cent of capacity on direct services on the route, the ACCC said.

"They are the two major airlines on the route and the only airlines offering daily flights, and so the major competitive constraint on each other. Competition between them will be greatly reduced under the proposed agreement," it added.

REUTERS