The Australian Competition and Consumer Commission has issued a draft determination proposing to deny authorisation to Air New Zealand and Air Canada to give effect to a Cooperation Agreement.
ACCC Chairman, Mr Graeme Samuel, said the ACCC is concerned that the proposed Cooperation Agreement is likely to reduce competition for flights between Australia and Canada.
"Air New Zealand and Air Canada are two of the four main carriers on the route."
The Cooperation Agreement would involve the two airlines jointly promoting and selling direct flights between Sydney and Vancouver (operated by Air Canada) and Auckland and Vancouver (operated by Air New Zealand).
The Cooperation Agreement also provides for the airlines to pool and share revenue in relation to the direct flights.
The ACCC considers it is important to ensure effective competition in aviation markets, in order to continue delivering choice and lower fares to consumers.
Mr Samuel said the ACCC is also not convinced that the Cooperation Agreement is needed to underpin the direct services, or will ensure the ongoing provision of direct services.
"On balance, the ACCC considers that the public benefits of the Cooperation Agreement are not likely to outweigh the public detriments."
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.
For media inquiries to the ACCC Chairman, Mr Graeme Samuel, please call Mr Brent Rebecca, ACCC Media, on (02) 6243 1317. For general inquiries, please call the Infocentre: 1300 302 502.
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