Australia's anti-trust regulator said on Tuesday it would allow an alliance between Qantas Airways Ltd and British Airways Plc. on the so-called 'Kangaroo Route' between Sydney and London to continue for another five years. Between them, Qantas and BA carry 40 percent of passengers flying between Australia and Europe and 30 percent of passengers travelling from Australia to Southeast Asia. The alliance between the two airlines has been in place since 1995 and is set to continue despite BA selling its 18.25 percent stake in Qantas last September.
Richard Branson's Virgin Atlantic and its discount sister airline Virgin Blue Ltd had sent submissions to the regulator claiming the way Qantas and BA co-operated on the routes was anti-competitive.
The Australian Competition and Consumer Commission ruling confirms its draft decision last August that the Joint Services Agreement (JSA), under which Qantas and BA co-ordinate their operations on the 'Kangaroo Route', could continue.
"It is clear from submissions made to the ACCC that there has been strong price competition on the Kangaroo Route, particularly for leisure travellers, over recent years, and the ACCC is satisfied that this price competition will continue," it said.
The ACCC said that while the alliance did lessen competition for business travellers on Australia/UK routes, this was outweighed by cost savings, the availability of discount seats and schedule connections.
Qantas shares ended Tuesday up 1.1 percent at A$3.73 in a weaker overall market, while British Airways shares added 0.5 percent to 272 pence in London morning trade.