China/ Australia: Government backs Qantas Airways

Qantas Airways has gained crucial government support for its plans to cement a stronger alliance with China Eastern Airlines, which will be key to helping the airline overcome opposition from the competition regulator to its deal.

The Australian Competition and Consumer Commission has signalled it will block the alliance due to concerns that it will give the two airlines more than 80 per cent of the direct capacity between Sydney and Shanghai.

But the Department of Infrastructure and Regional Development has taken the regulator to task over its draft decision last month, claiming it was “too narrowly focused” on the Sydney-Shanghai route instead of the operations of the wider Australia-China market.

In a strongly worded submission to the ACCC, the department said it “sees no reason to deny” the proposed alliance, pointing out that the advantages that will flow from the deal for travellers and the Australian economy were “exactly the benefits” that the government’s aviation policy was designed to support.

Full Content: The Sydney Morning Herald

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