ICCC proposes for code-sharing renewal

Business, Normal

The National, Friday March 4th, 2016

 The Independent Consumer and Competition Commission (ICCC) has put out a proposal to allow Air Niugini to renew and continue its code-share services with Qantas Airways Limited.

Under this code-share agreement, Qantas would buy some seats from Air Niugini and would resell those seats to its customers using its code.

The code-share services would operate between Port Moresby and Brisbane and Sydney. 

The Port Moresby to Brisbane leg covers both passenger and freight services while Port Moresby to Sydney is only for passenger services.

Acting ICCC chief executive officer Avi Hubert said the commission would like to see the code-share benefiting passengers travelling between Port Moresby and the two Australian cities with flights  flexibility and availability, lower airfares and improved quality of service.

Hubert said: “Although there were some competition issues, we have assessed that the public benefits that will result from the proposed arrangement will out-weigh the competition detriments such that the benefits enjoyed by consumers.

“We consider that  businesses under the current code-share arrangement will be maintained under the renewed authorisation.” 

According to ICCC’s assessment, the code-share services had the possibility of bringing more benefits to the community in terms of: 

  • Maintaining price competition in the PNG and Australia air services market as far as passenger and freight services are concerned;
  • increased flight options and frequencies that increase travellers’ choice of travel time and dates;
  • direct flights from Port Moresby to Sydney;
  • on-ward route connections for travellers from Australia through other destinations using Qantas’ established networks; 
  • job security for locally employed staff associated with Air Niugini’s operations; and,
  • To minimise the anti-competitive effects likely to result from the code-share arrangement ICCC proposes to impose conditions on Air Niugini and Qantas as part of it approval.

The commission said it had released its draft determination on the proposed code-share arrangement early last month.

The commission stated that it would release the final determination after consultation with relevant stakeholders later.