News
Cathay Pacific objects to Qantas codeshare rejection
June 14th 2019
In its first comments, Cathay says passengers have many options for Australia-Hong Kong travel. Read More »
Cathay Pacific is protesting Australia’s draft rejection of the proposed Qantas-Cathay partnership to codeshare on each other’s overlapping Australia-Hong Kong flights when sold with a connecting flight.
Cathay’s first comments in the six month proceeding come after Australia proposed to reject the partnership. Australia’s International Air Services Commission (IASC) made a sweeping rejection, writing: “The likely public benefits of the variation are substantially outweighed by the likely public detriment that would follow.”
Cathay Pacific Head of Regulatory Affairs Patrick Garrett wrote that IASC was wrong to assume the state of competition was already fragile and would be worsened by the proposed cooperation. He wrote: “Australian passengers do therefore have abundant choice on non-Qantas routes to Hong Kong.”
He also sought to placate concerns the the proposed cooperation would see Cathay and Qantas shift from local Australia-Hong Kong traffic to beyond Hong Kong thereby reducing Australia-Hong Kong passengers. “Accepted airline economics should provide some comfort. Direct traffic capacity will always enjoy higher priority in terms of capacity allocation vs connecting traffic,” he said in a simplified argument. However, there is a substantial and fluid debate at airlines of whether to pursue high-yielding local traffic or focus on total revenue of connecting itineraries
Garrett also said IASC put too much focus on Australia-Hong Kong non-stop flying being preferred over one-stop options. “Many of the HKG-Australia passengers already transit in an overseas hub airport, and so the suggestion that a transit via an overseas hub is inherently less attractive to a customer might be questioned,” he wrote.
Tickets for sale on June 13 for travel between Hong Kong and Sydney in August 2019 would take 9-10 hours non-stop, or 13-14 hours one-stop with Singapore Airlines, whose Changi hub is one of the more common stopovers between Australia and Hong Kong. SIA’s cheaper tickets had journey times of 13-21 hours. The cheapest tickets in the market were from Cebu Pacific, with one-way journey times of up to 23 hours.
