Proposal should be authorised with conditions: Ain

THE proposed code-sharing agreement between Link PNG Ltd and PNG Air should be authorised only with a number of conditions, Independent Consumer and Competition Commission chief executive officer Paulus Ain says.
He said the conditions should be aimed at amending the proposed code-share agreement to minimise likely anti-competitive effects and ensure that the two airlines continued to compete in the long-term.
On April 9, Link PNG lodged an application for authorisation pursuant to section 70 of the ICC Act 2002.
The application proposed a joint operating agreement (JOA) for a code-sharing with PNG Air for a duration of five years.
Link PNG said the proposed JOA would coordinate flight schedules, fleet allocation, operational and maintenance of services and charter airline operations between the two airlines.
Ain said the ICCC identified relevant markets for domestic scheduled and regular passenger transport services, air freight services and air charter services.
“The ICCC has considered that the proposed JOA should not form part of the authorisation because it constitutes an unjustifiable intrusion by Link PNG into the management of PNG Air.
“The former would gain decision-making control over key aspects of the strategy, operations and, consequently, the financial structure of the latter and, therefore, would be likely to substantially lessen competition and result in greater detriment than benefit to the public.”
He said Link PNG’s application to acquire 40 per cent of Nasfund shares in PNG Air was currently assessed.