British Airways and Qatar Airways will partner on flights between the UK, Europe and Australia under a five-year joint business agreement set to take wing in the second half of this year.
The pact, approved today by the Australian Competition and Consumer Commission to take effect from 29 May 2020, strides well beyond the current "arm’s length codeshare and interline arrangements" relationship of both airlines.
It will allow for BA and Qatar to co-ordinate on schedules, pricing, sales and marketing, capacity, frequent flyer programs and lounge access on routes "between four Australian cities and the UK/Europe (which) operate via Doha" – those cities currently being Canberra, Melbourne, Adelaide and Perth.
The northern hemisphere end of the alliance taps into over 100 destinations predominately in the UK, France, Germany and Spain.
Sydney is the sole exception, as the ACCC notes it is already served by both BA and Qatar Airways, with the Sydney-London route "highly contested... any attempt by the Parties to co-ordinate on the routes would be quickly defeated by the other airlines who offer services on the route, including Qantas, Emirates, Etihad, Singapore Airlines and Cathay Pacific."
The consumer watchdog says "the coordination is likely to result in public benefits from enhanced products and services due to more convenient travel options and improved customer services," and is unlikely to result in public detriments partly due to "the strength of competitors on relevant routes."
Beyond being members of the Oneworld alliance, Qatar Airways holds a 25.1% stake in British Airways' owner IAG.
The application by British Airways and Qatar Airways promised passenger upsides of
- more compelling and competitive travel options, such as by adjusting schedules to offer more convenient connection times
- seamless journeys when connecting between the Applicants on indirect services through enhanced customer support in London and Doha and reciprocal lounge access
- seamless booking and check-in on either Applicant’s website
- enhanced access to both Applicants’ frequent flyer programs
- fare combinability leading to a greater number of frequency choices for passengers, and
- optimised scheduling across both airlines (which is expected to increase efficiencies and generate cost savings)
Other passenger benefits called out include "the ability to jointly offer loyalty benefits, including reciprocal earn and burn of frequent flyer points" – benefits already included through both airlines' membership in the Oneworld alliance, but which at the same time could be beefed up as part of the JV.
And rather than the BA/QR tie-up reducing competition on the Kangaroo Route, the ACCC said it "considers that rival airlines will continue to strongly compete for passengers between Australia and the UK/Europe".
Front-runners in that race include "Qantas and Emirates, cooperating under an alliance", Singapore Airlines – with its Changi Airport hub serving as "a major transit point for UK / Europe-bound travellers" and China Southern and China Airlines, "operating between Australia and the UK / Europe, with mid-points in Guangzhou and Taipei."