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ACCC sets date for Qantas decision

D-DAY for Qantas in its attempt to cement its proposed union with Emirates will be December 20.
By · 10 Dec 2012
By ·
10 Dec 2012
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D-DAY for Qantas in its attempt to cement its proposed union with Emirates will be December 20.

That is when the Australian Competition and Consumer Commission will release its draft decision on the planned alliance between the airlines.

While not the final judgment, the so-called draft determination will give a clear idea of the competition regulator's position on the proposed tie-up.

The duo wants to co-operate on passenger and freight operations on routes from Australia to Europe, North Africa, the Middle East, Asia and New Zealand.

The chairman of the ACCC, Rod Sims, said on Friday its officials were still in the process of writing what would be a long draft decision.

Although there was a slim chance it would be released earlier, Mr Sims said the date set for making the decision public was December 20. "It may not be possible to bring it forward - we have to get this thing right," he said.

Other airlines, including Virgin Australia, have raised concerns about parts of the deal, but federal and state governments, Australian airports and tourism leaders have been overwhelmingly supportive.

Matt O'Sullivan

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Frequently Asked Questions about this Article…

The Australian Competition and Consumer Commission (ACCC) is preparing a draft determination on the proposed Qantas–Emirates alliance. The draft will set out the competition regulator’s view on the planned tie‑up, though it is not the final judgment.

The ACCC has set December 20 as the date to publish its draft decision on the proposed Qantas and Emirates alliance. ACCC chairman Rod Sims said officials were still writing a long draft and that the date may not be moved earlier because 'we have to get this thing right.'

Qantas and Emirates want to cooperate on both passenger and freight operations on routes from Australia to Europe, North Africa, the Middle East, Asia and New Zealand.

The draft determination provides a clear indication of the competition regulator’s position. For investors, that insight helps assess regulatory risk around Qantas’s international strategy and how the proposed alliance might affect competition on key routes.

Other airlines, including Virgin Australia, have raised concerns about parts of the deal. By contrast, federal and state governments, Australian airports and tourism leaders have been overwhelmingly supportive.

Rod Sims said ACCC officials were still writing what would be a long draft decision. He noted there was a slim chance it could be released earlier, but December 20 was set as the date because the regulator needs to get the decision right.

No. The draft determination is not the final judgment. It gives a clear idea of the ACCC’s position, but further steps and a final decision will follow after the draft is released.

Investors should read the draft determination to understand the ACCC’s concerns or proposed remedies, any indications of whether the alliance may be approved or restricted, and comments from stakeholders such as competing airlines, governments and airports.