With the Australian Competition and Consumer Commission moving to block Qantas’ proposed joint venture with China Eastern, Air China would consider stepping up if Qantas’ negotiations with the consumer watchdog came to a standstill.
“We do not rule out those possibilities,” Huang Bo, Chairman of the Air China Commercial Committee told Australian Business Traveller, adding that “there are lots of very good examples of cross-alliance operations.
“For example, Cathay Pacific – which belongs to Oneworld – has great cooperation with (Star Alliance member) Air China,” with arrangements covering lounge access, codeshare flights, frequent flyer ‘earn and burn’ and reciprocal shareholding between the two companies.
The ACCC claims that a closer Qantas/China Eastern tie-up would be of "significant public detriment" and would increase the airlines’ “ability and incentive to limit capacity and/or increase airfares on the Sydney-Shanghai route", despite this being the pair’s only common route.
While riling the ACCC, the proposed China Eastern joint venture has the public support of the Department of Infrastructure and Regional Development, Sydney Airport, the Australian and International Pilots Association, federal members of parliament plus and state and federal tourism bodies, which are also in favour of the move.
Qantas + Air China: a better fit?
While Air China also flies from Sydney to Shanghai three times per week with similarly-timed flights to Qantas, “the ACCC does not consider that Air China will sufficiently constrain Qantas and China Eastern in the event they decide to reduce or limit growth in capacity to increase airfares,” the ACCC said in its draft determination.
Air China already integrates with the Red Roo by way of an interline agreement for through-checked baggage for Australian domestic connecting passengers and the provision of Qantas-uniformed staff manning Air China’s check-in desks and boarding gates in Australia, although isn't currently a codeshare or frequent flyer partner of Qantas.
But even if a joint venture partnership with Air China came to fruition, Huang was quick to point out that “even if you have an alliance, you still face fierce competition.
“For example, for the European market we have Lufthansa – a close Star Alliance partner of Air China – and the competition between the two is still quite strong.”
Regarding a possible partnership with Air China, a Qantas spokesperson told Australian Business Traveller that “we are currently focused on our proposed joint venture with China Eastern and are in discussions with the ACCC about the draft determination.”
Chris Chamberlin travelled to Beijing as a guest of Air China.
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