Nov 21, 2012

Qantas/South Africa codeshare given the go-ahead until 31 Dec 2014

The International Air Services Commission has just announced a decision to grant Qantas' application for an allocation of seven services per week on the South Africa route for a further five years.

Under the decision, South African Airways is also authorised to code share on Qantas' flights operated to and from South Africa until 31 December 2014.

The determination continues to express "serious concerns that the code share arrangement may not be of benefit to the public," with third country carriers providing very limited competition from the codeshare gateway cities of Sydney and Perth.

The IASC said that it considers both carrier's incentives to introduce additional capacity in response to expected demand growth is "unlikely to materially differ in the future with and without the code share agreement".

It's also concerned that in this duopoly environment the intensity of competition is greatly limited by the way that the marketing carrier charges the other airline for its block of seats.

After 2014 the Commission believes there's a greater prospect of two carriers competing directly on one or both of the Sydney and Perth routes or possibly on another city pair.

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