Qualified Welcome For Draft Australian Determination

Qantas and British Airways today welcomed in qualified terms the Australian Competition and Consumer Commission’s (ACCC) Draft Determination on their application for a restated Joint Services Agreement (JSA).


Qantas Chief Executive James Strong said the draft determination, in its present form, would allow the two airlines to continue until 2003 the co-ordination of air services operated by each other between :


á Australia and Europe (via any intermediate point),
á Australia and intermediate points to Europe,
á Europe and intermediate points to Australia, and
á Other routes, which the airlines may agree from time to time.


It is expected that the restated Joint Services Agreement would come into effect in May of this year or earlier, as determined by the ACCC.


However, he expressed disappointment that the draft determination on the restated JSA proposed only a three-year period.

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He said that the integration of systems and schedules required a major investment and that a long-term regulatory commitment was needed to ensure the achievement of maximum efficiencies and long-term consumer benefits.


“Long lead times are required to deliver maximum benefits to our customers and to ensure a return on that investment for the companies.”


Mr Strong said that the current agreement, which had been approved since 1995, had delivered significant public benefits such as lower airfares between Australia and Europe, improved availability of discount fares and improved quality of services.


“Since 1995, Qantas and British Airways believe many fares have fallen by up to 25 per cent in real terms; the number of services per week between Australia and Europe has increased by 54 per cent, and the integrated information technology platforms of the two carriers have produced a better choice of consumer discounted airfare products,” he said


Mr Strong said that the restated JSA would allow Qantas and British Airways to renew and strengthen their long-term commitment to the integration of this part of their respective businesses.


“Through the current agreement, the two airlines have integrated business operations on the JSA routes enabling cost savings in aircraft utilisation, yield management, information technology, freight, airport services, inflight products and administration and sales offices,” he said.


“Because there is unprecedented competition in the international airline industry, airlines must respond to consumer demand for greater quality, scope, frequency and convenience of services to remain competitive.

British Airways General Manager, Investments and Joint Ventures Australasia Nick Tait said that in the past five years many substantial benefits for air travellers between Australia and Europe had been produced by co-operation between British Airways and Qantas.


“Tickets now offer greater value for money and greater flexibility in terms of routeings than ever before, including some highly innovative and attractively priced round-the-world packages, and we look forward to developing together even more consumer benefits in the future,” he said.


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