Qantas-Emirates partnership on track for five more years as ACCC finds public benefit to marriage

A partnership Qantas boss Alan Joyce has credited with saving the airline’s international business appears set to continue until 2028.

The competition watchdog has signalled its intention to allow Qantas and Emirates to continue their lucrative partnership until 2028, finding it is benefiting travellers.

After months of deliberation, the Australian Competition and Consumer Commission released a draft determination late Thursday, proposing to give the green light to the arrangement for another five years.

Under the joint venture that began in 2013, Qantas and Emirates share revenue and passengers on more than 100 routes in Australia, Europe and beyond.

The deal has been so successful, Qantas CEO Alan Joyce recently credited it with saving the airline’s international operation, which had lost money for many years.

“We spent years talking about closing it down, hiving it off, because we couldn’t think of a fix,” Mr Joyce said in May.

“Then the fix we came up with was the amazing Emirates deal.”

The only catch in the ACCC’s proposed approval was a concern the co-ordination between Qantas and Emirates could have an impact on competition on the Sydney-Christchurch route.

Air New Zealand is the only other carrier operating on the route, and ACCC commissioner Anna Brakey said they wanted to “monitor the competitive dynamics of the route”.

Overall Ms Brakey said the ACCC considered the proposed conduct by Qantas and Emirates would likely result in public benefits, such as increased connectivity and convenience, and greater loyalty program benefits for consumers.

“The co-ordination will give customers greater choice of flight times and flexibility when travelling on routes where the operations of Qantas and Emirates overlap,” she said.

Qantas CEO Alan Joyce has credited the deal with Emirates as saving the airline’s international business. Picture: Greg Wood/AFP

A Qantas spokesman said the two airlines welcomed the draft determination.

“Across nearly a decade, more than 15 million customers have enjoyed significant benefits of the two airlines working together, as well as the flow-on benefits to the tourism industry and local economies,” the spokesman said.

“The continuation of the partnership will enable millions of customers of both airlines to enjoy access to an expansive joint network across Australia, New Zealand, the UK, Europe and Middle East as well as ongoing frequent flyer benefits.”

Prior to the draft ruling, travel agents raised concerns about the joint venture, suggesting the market power of the two large airlines meant the benefits to consumers were minimal.

“The Australian Federation of Travel Agents submits that prices are currently set far above what any inflationary measures might lead them to be,” AFTA’s submission told the ACCC.

“If Qantas and Emirates are allowed to co-ordinate on this sort of practice, it does not drive them to create better prices and increase capacity when they are making so much profit out of the way they are currently structured.”

South Australia’s Axis Travel Centre voiced similar concerns, with managing director Max Najar urging the ACCC to ensure the airlines acted in the interests of consumers as well as commerce.

“The current relationship lacks solid substance, travel industry and consumer honesty and is thin on the actual factual benefits of most consumers,” Mr Najar wrote in his submission.

The ACCC is now seeking submissions to its draft determination, with a deadline of July 12.