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ACCC interview on airlines left out half the issues

There was an excellent interview between ACCC chairman Rod Sims and ABC Inside Business compere Alan Kohler this morning about waterfront productivity and the Virgin Australia bid to control and fully acquire Tiger Airways Australia and Skywest respectively.

Except for one thing. There was no mention of the proposed Qantas Emirates business partnership.

Sims summed up his task with matters Virgin with great clarity and betrayed not the slightest hint as to whether he would approve or disapprove of the group becoming a stronger Qantas competitor, but at the cost of removing the only other potential competitor for passengers in the domestic market by its gaining control of Tiger, which the Virgin says will remain independent, which they would say, wouldn’t they?

But with Qantas Emirates also to be considered, Sims is going to make a suite of momentous decisions affecting the future competitiveness of Australian air transport to an incredibly tight self imposed timetable of sometime in December.

Perhaps it is indicative of the more belligerent style of management at Qantas that its group CEO Alan Joyce has already said what he will do if he doesn’t get his way. He will end Qantas flights to London, from 31 March next year, because he has already resigned the necessary slots at Singapore the day before the requested approval of the ‘partnership’ with Emirates.

It could be, given the measured tenor of Sims’ commentary on these matters this morning, and earlier than today elsewhere, that this may not have been the right way for Qantas to approach ACCC on this matter. Qantas Emirates already amounts to the removal of a competitor, Qantas, from flights to London or Europe from any city in Australia other than token daily services to Heathrow from Sydney and Melbourne, which is not what the Qantas Sale Act of 1992 had in mind at all when the airline was privatised.

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  • 1
    patrick kilby
    Posted November 4, 2012 at 6:35 pm | Permalink

    Ben I think Alan Joyce said he would end one QF flight to London next year simply because he won’t have connections ex London to Europe (one quarter to one half of loads) so one flight to London is enough and makes sense is my reading of it.

    You can’t have a bet each way: either you are going through Dubai or not. If not then they start again and negotiate a new slot ex somewhere else and why not Dubai, without the continental Europe connections, note Frankfurt is still there as a backup. BA would not like to be left in limbo so I am not sure QF had much choice in the matter. The ACCC won’t knock it back holus bolus as they then would have to knock some much else back including Virgin and the new Asian entrans

  • 2
    Zarathrusta
    Posted November 5, 2012 at 10:49 pm | Permalink

    Reminds me so much of how Sol Traheo (spelling?) got the Government on Telstra’s side, and look where that got Telstra: the end of the local loop monopoly – replaced by the NBN.

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