Fare sales kick off airlines' alliance

QANTAS will begin selling fares for flights on its new network with Emirates within weeks after the competition regulator allowed the airlines to begin laying the ground work for their alliance.

The Australian Competition and Consumer Commission has decided to allow Qantas and Emirates to begin implementing their alliance because of the "long lead time required to market and sell tickets before the commencement of long-haul services".

The regulator has not allowed them to begin early preparations across the Tasman route, after it raised concerns last month about the impact on flights between Australia and New Zealand.

The airlines still require final approval - expected in March - for their alliance. Last month the ACCC gave tentative approval for the tie-up, which is focused on routes between Australia and Europe.

The regulator's granting on Thursday of "interim authorisation" will allow Qantas and Emirates to begin discussions on joint sales and pricing strategy, system integration and testing, customer handling, joint marketing, and scheduling and capacity co-ordination.

"Under interim authorisation, the applicants will be able to begin activities that will enhance the product and service offerings to Qantas and Emirates customers," ACCC chairman Rod Sims said.

"In making its decision, the ACCC has accepted written assurances from the parties that should the ACCC ultimately decide not to allow the alliance to go ahead, the airlines will accommodate consumers' bookings."

Qantas said fares on a combined network with Emirates were expected to be available within weeks once discussions on pricing had taken place. It would be for travel from April.

After ditching their request for "interim authorisation" in October, the airlines reapplied last month after the competition regulator gave tentative approval for their deal.

The proposed tie-up covers routes from Australia to Europe, North Africa, the Middle East, Asia and New Zealand. It will result in Qantas shifting its hub for European flights from Singapore to Dubai.

The ACCC gave tentative approval last month to the alliance because it was likely to lead to "material, although not substantial" benefits to consumers.

But in that draft decision the regulator indicated that it intends to knock back the two airlines' request for anti-trust approval to be granted for 10 years, deciding that half that time frame is more appropriate.

Aspects of the deal still need approval from regulators in New Zealand and Singapore.

New Zealand's Transport Minister, Gerry Brownlee, will decide whether the two airlines can extend their alliance to the trans-Tasman route.