THE Independent Consumer and Competition Commission (ICCC) has allowed Air Niugini to continue its code-sharing arrangement with Qantas Airways for another two years,
Code-sharing is a marketing arrangement, in which an airline places its designator code on a flight operated by another airline, and sells and issues tickets for that flight.
ICCC Commissioner Thomas Abe said the decision to grant authorisation for Air Niugini to continue with the code-share arrangement was not an easy one given that a thorough assessment was needed to ensure ICCC looked at relevant issues in the market.
“On balance, the ICCC was satisfied that the renewed code-share arrangement will result, or is likely to result in such a benefit to the public and therefore granted a conditional authorisation for a period of two years,” Mr Abe said.
He said that under section 77(6) of the ICCC Act, the test in an application for authorisation was that the public benefit grew as a result of a restrictive trade practice.
The code-share must outweigh the damage that may be caused as a result of the arrangement.
Mr Abe also stressed that “processes used by the ICCC when applying the test are open, transparent and consultative”.
Review of the code-share agreement began last April when Air Niugini and Qantas separately submitted the necessary applications to the ICCC and Australia’s international air competition policy advisory body, the International Air Services Commission (IASC).
Air Niugini sought a variation to an earlier determination by the IASC that allocated capacity to it on the PNG to Australian route.
Air carriers throughout the world continue to form code-share alliances to strengthen or expand their market presence or competitive ability.
The practice of code-sharing has helped air carriers overcome some of the bilateral restrictions and economic constraints that have limited international growth.