The Australian Competition Regulatory Authority said on Friday that it plans to prevent Qantas Airways and China Eastern Airlines from coordinating their operations between the two countries, citing competition concerns as demand increases.
The Australian Competition and Consumer Commission (ACCC) said the agreement allowing major rivals to coordinate passenger and freight transport between Australia and China until the end of March 2024 may breach competition law.
Qantas has been under the radar and the flagship has suffered significant reputational damage after the Australian Competition and Climate Commission filed a lawsuit alleging it sold tickets for thousands of canceled flights.
The regulatory body had previously granted preliminary approval to the two airlines to allow time to further evaluate the effects of coordination on public interest.
Australian Competition and Climate Commission Commissioner Anna Brakey said any additional services on routes other than Sydney-Shanghai could be of public benefit, but added that the Competition and Climate Commission was not convinced such services were likely to start between now and March 2024.
She added: “The main difference between now and previous licenses is that we have not obtained sufficient evidence that coordination will lead to additional services on other routes between Australia and China.”
However, the regulator said the temporary license remains valid, and the two airlines are expected to present arguments to change the regulator’s mind on terminating the licence.
The two companies did not immediately respond to Reuters’ request for comment.
