ACCC proposes to update authorisation allowing limited international tariff agreements
The Australian Competition and Consumer Commission today issued a draft determination proposing to revoke authorisation A90427 and grant substitute authorisation A91059 to Qantas Airways Limited*.
Qantas has applied for revocation and substitution of authorisation A90427 in relation to tariff arrangements with designated airlines that are required under Australia's air service agreements** (ASAs) with other countries, subject to the authorisation only offering protection under certain circumstances.
The ACCC considers that there are potentially significant anti-competitive detriments by allowing tariff agreements between Qantas and foreign airlines.
The ACCC notes however a number of ASAs require Qantas to reach agreement in limited circumstances with a competing foreign airline in relation to the establishment of tariffs. A small number of those requirements continue to be enforced by foreign governments, currently Japan and the Philippines.
The ACCC considers benefits are likely to result from the conduct in ensuring Australia can meet its international obligations. The authorisation will also ensure that Qantas can operate routes to a country in those limited circumstances where the foreign government concerned continues to require tariff cooperation in accordance with ASAs.
The ACCC is satisfied that the safeguards placed on the conduct are likely to limit the conduct to specific circumstances where the foreign government expressly requires tariff cooperation which will limit the detriment arising from the conduct.
The ACCC's draft determination will be available from the ACCC website.
The ACCC is seeking submissions from interested parties in relation to its draft determination. Submissions can be made to: The General Manager, Adjudication Branch, Australian Competition and Consumer Commission, GPO Box 3131, Canberra, ACT, 2601. Submissions can also be lodged by fax on (02) 6243 1121 or by email to: adjudication@accc.gov.au.
*Authorisation provides protection from court action for conduct or arrangements that might otherwise raise concerns under the competition provisions of the Trade Practices Act 1974. Authorisation is granted where the ACCC is satisfied that the benefit to the public from the conduct outweighs any public detriment. A party to whom authorisation had been granted may also apply to the ACCC for a minor variation of that authorisation
**An ASA specifies the terms and conditions of airline activity between two countries. The ASAs generally provide for the destinations that can be served in a particular country, and 'beyond' rights and the permitted frequencies per week. These bilateral ASAs normally include some provision relating to the tariffs that airlines may charge on services governed by the ASA.
