Dubai and Qantas: The ACCC in the picture

December 21, 2012 by J-Wire Staff
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The Australian Competition and Consumer Commission has expressed its view on the submission by the ECAJ on the creation of Dubai as a hub for Qantas flights.

qantas

The ACCC is planning to permit Qantas and Emirates to coordinate both their passenger and freight services for a period of five years subject to approval. They called for submissions from parties of interest.

The submission by The Executive Council of Australian Jewry. The Israel Law Centre, The Transport Workers’ Union and the The Australian & International Pilots Association:

Submissions from interested parties

The Executive Council of Australian Jewry Inc. (ECAJ) submits that Israeli passport holders or Australians who have travelled to Israel in the past may be unable to safely transit through Dubai, especially if their flight is delayed for a long period. The ECAJ requests that authorisation be conditional on the UAE government issuing a public statement that no such travellers will suffer any adverse consequences.

On 20 November 2012 the Minister for Foreign Affairs advised ECAJ that the UAE has confirmed foreign visitors whose passports contain Israeli stamps may enter the country. The executive director of ECAJ, Mr Peter Wertheim, submits that Qantas has also taken further steps, including providing Qantas staff at Dubai airport and a local Dubai hotline, in addition to an existing Australian hotline, to assist any travellers that encounter difficulties.99

The Israel Law Center also raises concerns about the legal risks of transiting via or travelling to the UAE and asks that the ACCC not approve the alliance unless Qantas and Emirates provide prominent, ongoing and explicit warnings of these risks.

The Transport Workers’ Union (TWU) submits concerns across a range of issues, including the importance of Qantas to the national psyche, the competence of senior management at Qantas, the effect of “off shoring Qantas”, and potential safety and security impacts from the alliance. The TWU also raises specific concerns regarding the loss of industry-specific skilled labour, whether Qantas will continue to contribute to Australia’s defence, and tourism effects from the alliance.

The Australian & International Pilots Association (AIPA) submits that the alliance may result in Qantas becoming a “marketing carrier” on international routes, with Emirates undertaking all the flights. AIPA also submits that these sorts of alliances are unlikely to provide much growth or other benefits for mature airlines. Accordingly, AIPA raises concerns over the consequences of further decline of Qantas, such as reduced employment, skilled labour losses, and the broader national interest of retaining a national carrier. The Australian

Licensed Aircraft Engineers Association (ALAEA) holds similar concerns.

J-Wire, Qantas/Emirates Update, http://www.jwire.com.au/news/qantasemirates-update/30335

 

The ACCC’s view:

The ACCC recognises that specific communities within Australia may be apprehensive about travelling through Dubai but considers the commercial and diplomatic consequences of the UAE discriminating against particular passengers to be a significant disincentive. Furthermore, the ACCC notes that the Australian government is active and vigorous in protecting its citizens’ rights abroad. The ACCC considers that the recent comments from the Minister for Foreign Affairs and Qantas provides this assurance.

The ACCC also notes that Qantas intends to move its hub to Dubai with or without the alliance with Emirates, therefore the proposed conduct does not result in additional risk to Australian passengers travelling through Dubai.

The ACCC notes that opinions on Qantas’ continued role as Australia’s national carrier are passionate and varied. It is not the ACCC’s role to determine the appropriate level of service from a national carrier, nor is it able to directly affect the long-term plans of Qantas. Instead, the ACCC looks to the demonstrated preferences of Australian consumers, which in relation to international air passenger transport service appear to consider pride in the national carrier as one factor among many (such as price, destination, scheduling, and service) which determine choice of airline.

In respect of the other concerns raised by the TWU, the AIPA and the ALAEA, it is not apparent to the ACCC that these issues would not continue to arise in the future without authorisation or are more likely to arise as a result of the alliance.

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