Airline News
Muscle flexing in Qantas-China Eastern deal
June 8th 2015
The debate about the proposed five-year alliance between Qantas Airways and China Eastern Airlines has flared up once again after the Chinese government urged the Australian Competition and Consumer Commission (ACCC) to take into consideration “the wider national interests”. Read More » The ACCC had earlier signalled its resistance and said the deal would give both carriers more than 80% of the direct capacity between Sydney and Shanghai, which analysts and unionists have said leaned “far too heavily on what is possible rather than what is actually likely”.
Canberra’s Department of Infrastructure and Regional Development said the ACCC’s draft decision was “too narrowly focused” on the Sydney-Shanghai route instead of the greater benefits it provides for the wider Australia-China market, and saw “no reason to deny” the proposed alliance. Canberra has identified inbound Chinese tourism as a major growth engine for the economy. It has recently passed legislation to allow Chinese visitors to apply for three-year, multiple entry tourist visas to Australia. Last week, Tourism Australia chairman, Geoff Dixon, also expressed support for the Qantas-China Eastern alliance, calling it “a worthy and desired outcome”. The ACCC has postponed its decision until August 31.
Meanwhile, Qantas has struck an in-principle agreement with its 1,300-member long-haul pilot union. The deal includes an 18-month wage freeze, followed by annual increments of 3%, understood to have been accepted only because Qantas chief, Alan Joyce, had previously made clear that reaching a deal with the pilots was one of several conditions that needed to be met before he would commit to buying the B787-9, which in turn would help secure the pilots’ careers. Qantas holds options and purchase rights for 50 -9s for delivery from 2017.
Across the Tasman, in Auckland, flag carrier Air New Zealand (Air NZ) “is very happy” with the performance of its -9 fleet as chief Christopher Luxon told This Week in Asia-Pacific Aviation in January. From December 11, Air NZ will add a thrice-weekly early morning Perth-Auckland service to connect directly to its growing U.S. network, including Vancouver, San Francisco, Los Angeles, Houston and Buenos Aires. The airline has also retimed one of its daily Auckland-Perth flights to reduce the connection time from North American cities to Western Australia.
